Patients Facing Higher Copays For Procedures Choose Cheaper Ambulatory Settings

James C. Robinson PhD MPH Leonard D. Schaeffer Professor of Health Economics Director, Berkeley Center for Health Technology Head, Division of Health Policy & Management School of Public Health, University of California– Berkeley University Hall, Berkeley, CA


MedicalResearch.com Interview with:

James C. Robinson PhD MPH
Leonard D. Schaeffer Professor of Health Economics
Director, Berkeley Center for Health Technology
Head, Division of Health Policy & Management
School of Public Health, University of California– Berkeley
University Hall, Berkeley, CA

 

Medical Research: What is the background for this study? What are the main findings?

Dr. Robinson: Employers and insurers face wide variation in the prices of similar tests and procedures within the same local communities, resulting from the indifference to price on the part of well-insured patients.  They are raising deductibles to increase price sensitivity, but deductibles mostly target low-cost primary care services whereas their concerns often center on high-cost specialty and facility services.  Some are adopting reference pricing, which sets a maximum insurer contribution for a particular type of test or procedure and then requires consumers selecting more expensive options to pay the difference themselves.  The insurers contribution limit typically is set at the median or other midpoint in the market distribution of prices.

We studied the implementation of reference pricing for colonoscopy, using data from the California Public Employees Retirement System (CalPERS) from 2009-13, with a control group from Blue Cross of California.  Our data include detailed claims from almost 300,000 colonoscopy procedures and patients.  We find that patients who must pay the extra fees themselves are much more likely to select cheaper ambulatory facilities for their colonoscopies, compared to consumers who do not face reference pricing.  This leads to lower prices being paid by the employer and significant savings.  Detailed analyses of gastroenterological and cardiovascular complications of the colonoscopy procedures found no adverse effect of reference pricing on quality.

Medical Research: What should clinicians and patients take away from your report?

Dr. Robinson: The pricing party is coming to an end.

Medical Research: What recommendations do you have for future research as a result of this study?

Dr. Robinson: Employers and insurers are experimenting with more cost sharing incentives for consumers.  We need a better understanding of how consumers respond and on what employers and policymakers can do to support informed consumer choice.

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James C. Robinson PhD MPH (2015). Patients Facing Higher Copays For Procedures Choose Cheaper Ambulatory Settings 

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