Paying patients to use lower-priced providers

Health Serv Res. 2022 Feb;57(1):37-46. doi: 10.1111/1475-6773.13711. Epub 2021 Aug 9.


Objective: Many employers have introduced rewards programs as a new benefit design in which employees are paid $25-$500 if they receive care from lower-priced providers. Our goal was to assess the impact of the rewards program on procedure prices and choice of provider and how these outcomes vary by length of exposure to the program and patient population.

Study setting: A total of 87 employers from across the nation with 563,000 employees and dependents who have introduced the rewards program in 2017 and 2018.

Study design: Difference-in-difference analysis comparing changes in average prices and market share of lower-priced providers among employers who introduced the reward program to those that did not.

Data collection methods: We used claims data for 3.9 million enrollees of a large health plan.

Principal findings: Introduction of the program was associated with a 1.3% reduction in prices during the first year and a 3.7% reduction in the second year of access. Use of the program and price reductions are concentrated among magnetic resonance imaging (MRI) services, for which 30% of patients engaged with the program, 5.6% of patients received an incentive payment in the first year, and 7.8% received an incentive payment in the second year. MRI prices were 3.7% and 6.5% lower in the first and second years, respectively. We did not observe differential impacts related to enrollment in a consumer-directed health plan or the degree of market-level price variation. We also did not observe a change in utilization.

Conclusions: The introduction of financial incentives to reward patients from receiving care from lower-priced providers is associated with modest price reductions, and savings are concentrated among MRI services.

Keywords: price shopping; price variation; rewards programs.

Publication types

  • Research Support, N.I.H., Extramural
  • Research Support, Non-U.S. Gov't

MeSH terms

  • Adult
  • Cost Savings / statistics & numerical data
  • Cost Sharing / economics*
  • Cost Sharing / statistics & numerical data
  • Health Benefit Plans, Employee / economics*
  • Health Benefit Plans, Employee / statistics & numerical data
  • Humans
  • Male
  • Motivation*
  • Organizational Policy
  • Patient Participation / statistics & numerical data*
  • Patient Preference / statistics & numerical data*