Copayment Levels and Their Influence on Patient Behavior-3

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B Y : K A R E N A G A LV I N , B E N G A R R I S O N , A N D S T E L L AS H A R M O U N

COPAYMENT LEVELS AND THEIR

INFLUENCE ON PATIENT BEHAVIOR IN EMERGENCY ROOM UTILIZATION IN

AN HMO POPULATION

Class Panel Presentation forMGT 798/398

Winter, 2011-2012



OUTLINE

ER’s are

Overcrowded!

Can InsuranceCompanies

Change PatientBehavior?

Are there other Factors and

Influences onBehavior?



WHY ARE ER’S OVERCROWDED?

Conveniences

ü Physician’s clinical appointments correlate with

traditional daytime hours when many people are atwork. Lack of evening and weekend hours.

ü When children are at daycare or school parents are

not aware of their children’s illness

ü ER Hospitals and HMO copayments

Yaremchuk, K., Schwartz, J., & Nelson, M. (2010). Copayment levels and their influence on patient behavior in emergency

room utilization in an HMO population. Journal of Managed Care Medicine, 13, 27 – 31.




The Effects of ER Hospitals Being Overcrowded

ü Becoming more expensive

ü Patients avoid Medical care

ü Quality of care decreases

Gruber, J. (2006). The role of consumer copayment's for healthcare:lessons from the rand health

insurance experiment and beyond. (pp. 1-18). Menlo Park, CA: The Henry J. Kaiser Family Foundation.




Emergent and Non-emergent – Level of Copayments



0%

5%

10%

15%

20%

25%

30%

35%

0 10 to 40 51 to 52 75 100 to 150




Competition

ü Insurance companies attract new customers

ü Low Copayments





CAN INSURANCE COMPANIES CHANGEPATIENTS BEHAVIOR THROUGH

COPAYMENTS?

Study to Determine the Effects of Co-Pays on ER utilization rates

Study By Henry Ford Medical Group and the Health Alliance Plan HMO (HAP)

ü HAP was largest Health Maintenance Organization in Michigan

ü HAP members had the highest ER Utilization rates in MI – 346 Visits/ 1,000 members

ü HAP had largest percentage of patients with $0 ER Co-Pays – 44%






COPAYMENTS?

Study to Determine the Effects of Co-Pays on ER utilization rates…

ü HAP reassigned Co-Pay levels for patients*

ü 0$ -> $10 -> $25 -> $30 -> $40 -> $50 -> $52 -> $75 -> $100 -> $150

ü *Co-Pay was waived if ER visit resulted in Hospital Stay

ü Plan Members were notified of changes through various methods

ü Tracked ER Utilization rates among members for next 2 years

ü Maintained policy that preauthorization for ER visits unnecessary

ü Patients still encouraged to go to closest ER when emergency arises

ü Made Distinctions between Emergent and Non-Emergent Conditions using ICD-9

Codes

ü Analyzed results to determine effects..






COPAYMENTS?

In 2005 - $0 Co-Pay = 346 Visits per 1000 Members

2007 Results



ER VISITS PER THOUSAND

CO-PAY 2007 emergent visits 2007 non-emergentvisits

2007 All visits

$0 297 113 411

$ 10-$40 249 101 350

$50 208 65 274

$75 179 56 235

$100-$150 165 43 208




COPAYMENTS?

The Magic Number is $50

ü 30-45% reduction in emergent visits

ü 42-62% reduction in non-emergent visits

ü Overall ER reduction of 33-49% for patients with co-pays of $50-$150

ü Numbers reflect important cost differential between ER and Physician visit co-pays

ü Average Physician Visit Co-pay is $15-20

ü $50 ER Co-pay represents > 50% increase






COPAYMENTS?

Results from Similar Studies:

1970’s RAND Study – First documentation that introduction of ER co-paysdecreased utilization by 20%*

1996 Kaiser Permanente HMO – Study in Northern CA showed 15% decline in ERutilization after introducing co-pays of $25-$35*

2006 Kaiser Permanente HMO – Reported 12% Decrease in ER Utilization with $20-$35 Co-pay , and 23% Decrease with $50-$100 Co-pay*

Several other Reports concluded that Increased Co-pays did NOT lead toincrease in unfavorable results, and patients did NOT find alternatives to medical

care*


room utilization in an HMO population. Journal of Managed Care Medicine, 13, 27 – 31.*Additional Sources Cited at end



OTHER INFLUENCES ON PATIENT

BEHAVIOR

Even if patients have financial incentive to changebehavior, other factors are working for – or against – them:

ü Financial Incentives to Physicians

ü Insurance Plan Design for Sales

ü Hospitals Seeking to Retain Revenue






BEHAVIOR

Financial Incentives to Physicians

ü MCOs implementing incentive programs to reduce costs,

increase quality

ü Data collection and analysis used to improve usage rates

ü Blue Cross Blue Shield results

ü Extended office hours, patient education on treatment plan

Blue Cross Blue Shield of Michigan (2012). Physician group incentive program. Retrieved from

http://www.bcbsm.com/provider/value_partnerships/pgip/




BEHAVIOR

Insurance Plan Design for Sales

ü Sales team designs products to entice and keep members

ü Plans without higher ER copayments are more favorable

ü Other factors include deductible, drug benefits

ü Employers choose plan design, not employees






BEHAVIOR

Hospitals Seeking to Retain Revenue

ü Retail clinics vs. hospital clinics

ü ED is key source of admissions

ü Low-acuity, insured patients are profitable

ü Promotion of accessibility and convenience






BEHAVIOR

Multimedia Promotion of ER Wait Times

Edward Hospital & Health Services. (2011). Edward ER Wait Times (Version 1.1) [Mobile application software]. Retrieved fromhttp://itunes.apple.com/

Edward Hospital & Health Services. (2012). Retrieved from http://www.edward.org/



CONCLUSIONS

ER Overcrowding Continues to be an issue

Co-Payments are proven to help reduce ER utilization

rates, particularly for non-emergent conditions

The $50 fee appears to be the co-payment level atwhich patient demand for ER services is most

effected

There are a number of other influences on patientbehavior that must be addressed as well



SOURCES

• Blue Cross Blue Shield of Michigan (2012). Physician group incentive program. Retrieved fromhttp://www.bcbsm.com/provider/value_partnerships/pgip/

• Edward Hospital & Health Services. (2011). Edward ER Wait Times (Version 1.1) [Mobile application software].Retrieved from http://itunes.apple.com/

• Edward Hospital & Health Services. (2012). Retrieved from http://www.edward.org/

• Gruber, J. (2006). The role of consumer copayment's for healthcare:lessons from the rand health insuranceexperiment and beyond. (pp. 1-18). Menlo Park, CA: The Henry J. Kaiser Family Foundation.

• Hsu, J., Fung, V., Brand, R., Selby, J., Fireman, B., Newhouse, J., & Reed, M. (2004). Cost-sharing: Patientknowledge and effects on seeking emergency department care. Med Care, 42, 290-296.

• Reed, M., Fung, V., Brand, R., Ray, G., Fireman, B., Newhouse, J., Selby , J., & Hsu, J. (2005). Care-seekingbehavior in response to emergency department copayments. Med Care, 43, 810-816.

• Yaremchuk, K., Schwartz, J., & Nelson, M. (2010). Copayment levels and their influence on patient behavior in

emergency room utilization in an HMO population. Journal of Managed Care Medicine, 13, 27 – 31.

Copayment Levels and Their Influence on Patient Behavior-3

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