Paying Patients to Be Better Consumers of Health Care

One strain of changing the health system has been focused on improving consumer behaviors–find better quality services at a lower price.  This is a difficult task, given that many patients with heavy health care use have low “health literacy”.  Making tools and aid available may not be enough to help patients be “better” health care consumers.  A new study in Health Affairs explores whether a more blunt instrument–paying people to make certain choices–will have more impact.   (HA Article)   High-deductible plans do this indirectly, and reference pricing does as well, but they create a saving of money spent, which may be less tangible to a consumer than getting a check, although the economic effect is the same.  The authors looked at an incentive program used by 29 employers buying coverage from a large Blues company in 2017 and compared prices, provider choice and utilization before and after implementation of the program.  The plan already made available to members a price shopping tool and telephonic advice on selecting a service and provider.  Recipients of 135 services, including such things as imaging services and joint replacement, were eligible for a reward, in the form of a check to the member, if they used lower-price providers.  The size of the check ranged from $25 to $500, depending on the service and the cost-savings.  To get the reward patients had to call the advice line or use the price tool before getting the service.  The program did not otherwise change benefit design, including out-of-pocket costs.

In addition to the pre and post-intervention analysis, there was a comparator group of enrollees who did not have access to the incentive program.  As these analyses usually show, there was a wide variation in prices for almost all of the services, often a range in which the price at the 75th percentile was two to four times higher than the price at the 25th percentile.  So ample opportunity for savings.  This variation usually affects both what the plan and the member pay toward total cost.  After the incentive program was introduced, 8% of patients in the intervention group used the one of the tools, compared to 1.4% in the comparison group.  1.9% of services received a reward, or about 23% of patients who used a tool.  The mean payment was $114.  Average prices paid declined by about 2% after implementation of the program.  Imaging saw the greatest impact, not surprising as it is a commodity service.  Utilization of the included services also declined slightly, which is interesting, because patients didn’t get a check, although they may have saved on cost-sharing.  Apparently just thinking more about choice of provider made some patients decide they didn’t really need the service at all.  The ROI for the employer was strong.  This was just for one year of the program.  You might reasonably expect a growing impact over time.  This research indicates again that people respond more strongly to getting money than saving it.  It would be important to examine quality effects as well, but these programs seem promising.