Objective: To test whether out-of-pocket costs and negotiated hospital prices for childbirth change after enrollment in high-deductible health plans (HDHPs) and whether price effects differ in markets with more hospitals.
Data sources: Administrative medical claims data from 2010 to 2014 from three large commercial insurers with plans in all U.S. states provided by the Health Care Cost Institute (HCCI).
Study design: I identify employer groups that switched from non-HDHPs in 1 year to HDHPs in a subsequent year. I estimate enrollees' change in out-of-pocket costs and negotiated hospital prices for childbirth after HDHP switch, relative to a comparison group of employers that do not switch plans. I use a triple-difference design to estimate price changes for enrollees in markets with more hospital choices. Finally, I re-estimate models with hospital-fixed effects.
Data collection: From the HCCI sample, childbearing women enrolled in an employer-sponsored plan with at least 10 people.
Principal findings: Switching to an HDHP increases out-of-pocket cost $227 (p < 0.001; comparison group base $790) and has no meaningful effect on hospital-negotiated prices (-$26, p = 0.756; comparison group base $5821). HDHP switch is associated with a marginally statistically significant price increase in markets with three or fewer hospitals ($343, p = 0.096; comparison group base $5806) and, relative to those markets, with a price decrease in markets with more than three hospitals (-$512; p = 0.028). Predicted prices decrease from $5702 to $5551 after HDHP switch in markets with more than three hospitals due primarily to lower prices conditional on using the same hospital.
Conclusions: Prices for childbirth in markets with more hospitals decrease after HDHP switch due to lower hospital prices for HDHPs relative to prices at those same hospitals for non-HDHPs. These results reinforce previous findings that HDHPs do not promote price shopping but suggest negotiated prices may be lower for HDHP enrollees.
Keywords: consumer behavior; high-deductible health plans; hospital prices; insurance benefit design; price shopping.
© 2021 Health Research and Educational Trust.