NCPA - National Center for Policy Analysis

Some Insurers Paying Patients Who Agree To Get Cheaper Care

March 29, 2012

In recent years, insurers have tried to cajole consumers into using less expensive health care providers by promising lower copayments and other cost-sharing breaks for members who select those doctors and hospitals.  Lately, they're trying an even more direct approach: cash rewards, says Kaiser Health News.

  • Some Anthem Blue Cross and Blue Shield members in New Hampshire, Connecticut and Indiana can receive $50 to $200 if they get a diagnostic test or elective procedure at a less expensive facility than the one their doctor recommended.
  • The offer covers nearly 40 services, from standard radiology tests such as mammograms and MRIs to such surgical procedures as hip and knee replacements, hernia repair, bariatric surgery and tonsillectomies.

It seems to be working.

  • The city of Manchester, N.H., the first employer to pilot Anthem's Compass SmartShopper program in January 2010, has saved more than $250,000 in health care costs in two years, even after factoring in the cash rewards paid to the 476 members who have participated.
  • The differences in costs can be eye-popping: According to Anthem data, in Manchester a hernia repair ranges in price from $4,026 on the low end to $7,498 on the high end; a colonoscopy could cost $1,450 to $2,973.

Physician groups have some concerns.  "It appears as though the decision is being made by the health plan, and tiering of providers is being made simply on an economic basis," says Scott Colby, executive vice president of the New Hampshire Medical Society.  "We have concerns about giving economic incentives without giving weight and credence to quality measures."

Physicians are also concerned that these programs may hinder care coordination among providers at a time when such coordination is considered key to managing patients' health and controlling health care costs.

Source: Michelle Andrews, "Some Insurers Paying Patients Who Agree To Get Cheaper Care," Kaiser Health News, March 26, 2012.

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