Tiered cost-sharing for primary care gatekeeper clinics

Bryan E. Dowd, Tsan-Yao Huang, Tim McDonald

Research output: Contribution to journalArticlepeer-review

1 Scopus citations


Efforts to improve the efficiency of the US health-care system involve both provider payment reform and efforts to give consumers the information they need to choose efficient providers and a financial incentive to do so. An example of the latter type of initiative is tiered cost-sharing. We analyze data from a long-standing tiered cost-sharing system for primary care gatekeeper clinics. These clinics control access to specialists and hospitals and are held accountable for their patients’ total annual risk-adjusted spending on covered health-care services. Consumers choosing higher cost clinics face higher levels of deductibles, copayments, and out-of-pocket maximums. We find that when choosing a primary care clinic, consumers are responsive to the clinic’s tier. Consumers exhibit a high level of inertia, but nonetheless, many clinics voluntarily reduce their fees to move to, or retain placement in, lower cost tiers.

Original languageEnglish (US)
Pages (from-to)306-332
Number of pages27
JournalAmerican Journal of Health Economics
Issue number3
StatePublished - Jun 1 2021

Bibliographical note

Funding Information:
Funding for the analysis was provided through a SHARE grant from the Robert Wood Johnson Foundation and the Donaghue Foundation.

Publisher Copyright:
© 2021 American Society of Health Economists.


  • Consumer choice
  • Health insurance
  • Tiered cost-sharing


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