Does Enrollment in High Deductible Health Plans Encourage Price Shopping for Physician Office Visits
From 2006-2013, enrollment in high deductible health plans (HDHPs) among those with employer-sponsored insurance increased from 4 to 20 percent. Prior work has consistently demonstrated that HDHP enrollment leads to a reduction in medical spending. However, the mechanisms through which spending is reduced remain unclear. While HDHP members reduce utilization of care, it is unknown whether they also preferentially switch to lower-cost physicians. In this study, we evaluate whether HDHP enrollment is associated with a switch to lower-priced primary care physicians for office visits.
Data and Population
We used longitudinal claims data from 2004-2010 compiled by a health benefits consulting company (Ingenix). The data consists of administrative insurance claims from more than 40 large national employers. We restricted the sample to two types of enrollees: those who were enrolled in a traditional plan in the first year and switched to a HDHP in the second year (HDHP group) and those who were enrolled in a traditional plan in both years (control group). We define markets from the patient perspective as a unique combination of plan and hospital referral region (HRR). We limited our sample to plan-HRRs which included enrollees from both groups.
We started by comparing the primary care physician office prices paid by patients in HDHPs versus traditional plans in the second year (post-period). However, this simple approach could be biased if there are differences in patients’ price shopping at baseline. To address the bias, we compared the prices between treatment and control group in the pre-period within each plan-HRR. In the pre-year the price difference between the two groups should reflect pre-existing differences in price shopping preferences between the two groups. Our final framework was to estimate the impact of HDHP enrollment on price shopping under difference-in-difference (DID) framework with plan-HRR, and year, fixed effects. In our analyses we divided the population between those who switched physicians and those who did not switch physicians. If price shopping is occurring, we should only observe such an effect among those who changed physicians in the HDHP group.
There were 644,176 enrollees in our sample among of whom 104,617 enrollees switched to a HDHP. The average price for a follow-up primary care physician office visit across the markets was $76. Prior to HDHP enrollment, HDHP enrollees paid slightly less for a physician office visit than the control group ($1.08, p<0.01). Twenty-six percent enrollees in the treatment group changed physicians, compared to 22% in the control group (p<0.01). In the DID model across all enrollees, switching to a HDHP was not associated with an overall lower price for primary care physician services (p=0.52). In the DID model HDHP enrollees who changed physicians (n=27,001), average price paid for a primary care physician visits was $1.85 lower, but the difference was not statistically significant (p=0.20).
We do not find evidence that HDHP enrollment encourages price-shopping for primary care physician office visits.