Tiered cost-sharing for primary care gatekeeper clinics

Bryan E. Dowd, Tsan Yao Huang, Tim McDonald

Research output: Contribution to journalArticlepeer-review

Abstract

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)
JournalAmerican Journal of Health Economics
DOIs
StateAccepted/In press - 2021

Bibliographical note

Publisher Copyright:
© 2021 American Society of Health Economists.

Keywords

  • Consumer choice
  • Health insurance
  • Tiered cost-sharing

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