This article is more than 5 years old. Information may no longer be current.
Reference payment for colonoscopy reduces costs
Implementing a reference payment initiative that provided full insurance coverage at low-priced facilities but required cost sharing for high-priced alternatives saved the California Public Employees’ Retirement System $7 million on colonoscopy spending over 2 years, according to recent study data.
“Some employers now are experimenting with payment methods that seek to counter high health care prices while upholding consumer access to valuable services,” the researchers wrote. “They are establishing reference payments in their insurance benefits, providing full coverage up to a defined contribution limit while requiring the patient to pay the difference between this limit and the price actually charged if a high-priced facility is chosen.”
Aiming to determine the effect a reference payment initiative has on facility choice, employer spending, consumer cost sharing and procedural complications, researchers from University of California-Berkley and UC-San Francisco analyzed insurance claims data on 21,644 individuals enrolled in the California Public Employees’ Retirement System (CalPERS) who underwent colonoscopy in the 3 years before reference payment was implemented in January 2012, and data on 13,551 patients who underwent colonoscopy in the subsequent 2 years. They also collected data on 258,616 controls who were enrolled in Anthem Blue Cross and underwent colonoscopy during the same 5-year period but did not participate in a reference payment initiative.
CalPERS members used low-priced facilities 68.6% of the time in 2009 and 90.5% of the time in 2013, corresponding to a 17.6% (95% CI, 11.8-23.4) increase in use of low-priced facilities after reference payment implementation (adjusted for patient demographics, comorbidities and other factors).
The mean price paid for colonoscopy among CalPERS members was $1,587 (95% CI, 1,555-1,618) in 2009 and $1,716 (95% CI, 1,678-1,753) in 2011, which then dropped to $1,508 (95% CI, 1,469-1,548) in 2013; the reference payment initiative was found to reduce the mean price paid by 21% (95% CI, −26 to −15.6).
Implementation of the reference payment initiative was found to be insignificantly associated with a 0.18% reduced rate of total complications (95% CI, –0.69 to 0.32).
“As reported in this study, the implementation of reference payments for colonoscopy accelerated the shift in patient choice toward lower-priced facilities. This led to substantial reduction in the mean price paid for the procedure, without any observed reduction in safety,” the researchers concluded. “In the first 2 years after implementation, CalPERS saved $7 million (28%) compared with what it would have spent on colonoscopy in the absence of a reference payment initiative.”
In an accompanying editorial, David Lieberman, MD, from Oregon Health and Science University, and John Allen, MD, from Yale University School of Medicine, wrote that although the study’s findings “support the value of reference pricing for reducing costs of colonoscopy, several key issues require further study.”
“Regardless of whether the discussion is about reference or bundled pricing for colonoscopy, knee or hip replacements or other procedures, public reporting of cost information, as well as meaningful quality benchmarks, should be required. Patients selecting lower-cost centers require assurances that they are receiving high-quality care,” they wrote.
“We are encouraged by the increasing evidence that new approaches to payment, such as bundling and reference pricing, can bend the cost curve for procedures such as colonoscopy, while maintaining access and quality. But there are many unknowns and continued study and monitoring is essential as these approaches become more widely used. We should continue to seek improved payment models that ensure that patients have incentives, not disincentives, to obtain important and high-quality preventive care,” they concluded. – by Adam Leitenberger
Disclosure: The researchers report no relevant financial disclosures. Lieberman reports he is on scientific advisory boards for Exact Sciences, Given Imaging, Ironwood Pharmaceuticals and Motus GI. Allen reports he is under contract for internal consulting with gMed, Olympus and Pentax.