Are patients able to shop for lower priced providers? – Healthcare Economist


This is what a study by Whaley et al. (2021) aims to find out.

Many employers have introduced rewards programs as a new benefit design in which employees are paid $25–$500 if they receive care from lower-priced providers. Our goal was to assess the impact of the rewards program on procedure prices and choice of provider and how these outcomes vary by length of exposure to the program and patient population.

The authors use health insurance claims data for about 4 million individuals to find the answer. They examine changes in average price paid and provider market share for patients who’s employers introduced the new benefit design with patient direct payments compared to patients without this incentive.

Introduction of the program was associated with a 1.3% reduction in prices during the first year and a 3.7% reduction in the second year of access. Use of the program and price reductions are concentrated among magnetic resonance imaging (MRI) services, for which 30% of patients engaged with the program, 5.6% of patients received an incentive payment in the first year, and 7.8% received an incentive payment in the second year. MRI prices were 3.7% and 6.5% lower in the first and second years, respectively. We did not observe differential impacts related to enrollment in a consumer-directed health plan or the degree of market-level price variation. We also did not observe a change in utilization.

One key concern if you pay patients would be whether individuals use health care services just to get paid to do so. Thus, while the scheme appears to have had its intended impact of lowering the prices employers paid, it is unclear the extent to which such a scheme could be rolled out more broadly. Further, for Medicare patients, balance billing is de facto prohibited thus making patient incentives for this patient population more difficult to implement.


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