When a large state employer – California’s public employee system – switched to “reference payment” health insurance coverage of colonoscopy, patients shifted toward using lower-priced facilities and the price of the procedure dropped by 20%, according to a report published online Sept. 8 in JAMA Internal Medicine.
This reference payment plan provided full coverage for colonoscopy up to the reference payment limit of $1,500, requiring patients to pay the difference between this limit and the price they were actually charged if they chose a higher-priced facility. The $1,500 limit was set at the 80th percentile of the range of prices charged by all ambulatory surgical centers in the region; most hospital-based colonoscopy facilities charged more, said James C. Robinson, Ph.D., of the University of California-Berkeley School of Public Health.
Dr. James C. Robinson
He and his coinvestigators analyzed insurance claims data, comparing the costs of 21,644 colonoscopies performed during the 3 years preceding this type of coverage with those of 13,551 colonoscopies performed during the 2 years after reference payment coverage was implemented. They compared these findings with those for a control group: 258,616 people covered by a standard health insurance plan that remained the same during the 5-year study period.
During the earlier period, 69% of state enrollees underwent colonoscopies at the less-expensive ambulatory centers, while the remaining 31% had them at more expensive hospital-based outpatient departments. After reference payment was implemented, the proportion of enrollees who chose the less expensive option rose to 86% the first year and to 90% the second year. In comparison, the control group’s use of ambulatory centers remained steady at 71%-74% throughout the study period.
After the reference payment plan was implemented, the mean price paid per colonoscopy decreased by 20.3% in the first year and 21.0% the second year among the state employees, while it rose in the control group. With reference payment, each colonoscopy cost $476 less the first year and $576 less the second year than with standard health insurance, Dr. Robinson and his associates said (JAMA Intern. Med. 2015 Sep 8. doi:10.1001/jamainternmed.2015.4588).
At the same time that prices dropped, there were no significant changes in complication rates, suggesting that the quality of care did not suffer. The incidence of serious gastrointestinal complications (including perforation, lower GI bleeding, and infection), other gastrointestinal complications (such as paralytic ileus, nausea, vomiting, dehydration, pain, diverticulitis, and enterocolitis), and cardiovascular complications (arrhythmia, congestive heart failure, cardiac or respiratory arrest, syncope, hypotension, and shock) remained steady throughout the study period.
During the first 2 years after implementation of the reference payment system, the state public employee system saved approximately $7.0 million, or 28%, compared with what it would have spent on colonoscopy without that system, the investigators noted.