May 01, 2019
Employers are increasingly turning to financial reward programs that encourage the choice of lower-cost providers, according to Christopher Whaley, lead author of a recent study by RAND Corporation. “We found these efforts to be modestly successful, especially for imaging services,” he said. The study looked at a reward program by Blue Cross/Blue Shield in Illinois, Montana, New Mexico, Oklahoma, and Texas.
Patients were paid $25 to $500 to use a lower-cost medical provider for 135 elective procedures. Average reward payments ranged from $41 for ultrasounds to $409 for major surgical procedures.
Only about 8 percent of enrollees used the price shopping tools. But the program still saved payers $2.3 million. Savings totaled $8 per plan enrollee over 12 months, including the cost of administering the program.
The average price for all eligible services dropped 2.1 percent. The decrease was greatest for MRIs (4.7 percent), ultrasounds (2.5 percent), and mammograms (1.7 percent).
In contrast, reference-pricing programs save as much as 15 percent per procedure. “Reward programs are less likely to cause financial hardship and create controversy among employees,” said Whaley. “This strategy is appealing to employers because, compared to alternatives like high-deductible health plans or reference pricing, which limits reimbursement to a set price, offering a cash reward encourages patients to price shop without exposing them to increased out-of-pocket costs,” added Dr. Ateev Mehrotra of RAND.
