Integrating Patient Incentives with Episode-Based Payment
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Lorens A. Helmchen
,
William E. Encinosa
Abstract
To rein in cost, payers are exploring bundled payment, which aggregates fees for a range of services into a single prospective payment. While under bundled payment providers would have incentives to reduce cost, they might also withhold more expensive care that patients prefer. We explore how bundled payment could be aligned with a benefit design that would encourage patients’ consideration of cost without jeopardizing access to the most expensive treatments. Least-costly-alternative approaches allow patient choice but might deter patients from choosing more expensive care by exposing them to potentially large out-of-pocket payments. A novel “shared-savings supplement” would reward patients for choosing the least costly alternative with a supplemental cash disbursement and thus allow them to share in any cost savings. This cash incentive for the least-costly-alternative allows a reduction of the out-of-pocket payment for the expensive alternative. Thus, patients would still have the option of the more expensive therapy while facing only a modest out-of-pocket cost. Such benefit modifications could be aligned with bundled payment by splitting the responsibility for the incremental cost of more expensive care between patients and their providers.
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Articles in the same Issue
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Articles in the same Issue
- Masthead
- Masthead
- The Effect of Pharmaceutical Innovation on Longevity: Patient Level Evidence from the 1996–2002 Medical Expenditure Panel Survey and Linked Mortality Public-use Files
- Price Shopping in Consumer-Directed Health Plans
- The Effect of Comprehensive Smoking Bans in European Workplaces
- Should Global Health be Tailored Toward the Rich? Altruism and Efficient R&D for Neglected Diseases
- Quantifying the Value of Personalized Medicines: Evidence from COX-2 Inhibitors
- Integrating Patient Incentives with Episode-Based Payment
- Better Quality of Care or Healthier Patients? Hospital Utilization by Medicare Advantage and Fee-for-Service Enrollees
- AIDS and Conflict: Micro Evidence from Burundi1)
- Measuring the Financial Exposure from Medical Care Spending Among Families with Employer Sponsored Insurance
- Why are Testing Rates so Low in Sub-Saharan Africa? Misconceptions and Strategic Behaviors
