Do high‐deductible health plans affect price paid for childbirth?

Abstract

Objective To test whether out‐of‐pocket costs and negotiated hospital prices for childbirth change after enrollment in high‐deductible health plans (HDHPs) and whether price effects differ in markets with more hospitals. Data Sources Administrative medical claims data from 2010 to 2014 from three large commercial insurers with plans in all U.S. states provided by the Health Care Cost Institute (HCCI). Study Design I identify employer groups that switched from non‐HDHPs in 1 year to HDHPs in a subsequent year. I estimate enrollees' change in out‐of‐pocket costs and negotiated hospital prices for childbirth after HDHP switch, relative to a comparison group of employers that do not switch plans. I use a triple‐difference design to estimate price changes for enrollees in markets with more hospital choices. Finally, I re‐estimate models with hospital‐fixed effects. Data Collection From the HCCI sample, childbearing women enrolled in an employer‐sponsored plan with at least 10 people. Principal Findings Switching to an HDHP increases out‐of‐pocket cost $227 (p < 0.001; comparison group base $790) and has no meaningful effect on hospital‐negotiated prices (−$26, p = 0.756; comparison group base $5821). HDHP switch is associated with a marginally statistically significant price increase in markets with three or fewer hospitals ($343, p = 0.096; comparison group base $5806) and, relative to those markets, with a price decrease in markets with more than three hospitals (−$512; p = 0.028). Predicted prices decrease from $5702 to $5551 after HDHP switch in markets with more than three hospitals due primarily to lower prices conditional on using the same hospital. Conclusions Prices for childbirth in markets with more hospitals decrease after HDHP switch due to lower hospital prices for HDHPs relative to prices at those same hospitals for non‐HDHPs. These results reinforce previous findings that HDHPs do not promote price shopping but suggest negotiated prices may be lower for HDHP enrollees.

Deductible imputation in administrative medical claims datasets

“…This method predicts deductibles using plan‐specific variations in the observed relationship between individual deductible and total spending amounts. 24 To implement it, we regress each enrollee's annual deductible spending on their total annual spending (plan plus out‐of‐pocket), common demographic covariates (gender and age), and fixed effects for each plan (details are in Supporting Information, Appendix 1 ). Using the coefficients from the best‐fit regression model, we predict deductibles for each plan at a fixed amount of total spending, which we set at $10,000 to exceed most deductibles.…”

“…Indeed, HDHPs have been shown to reduce health care spending, largely by reducing utilization 6–10 . Some evidence shows HDHPs decrease valuable medical service utilization and worsen health; other studies show no effects on health and that patients disproportionately reduce potentially wasteful health services 11–18 …”

“…[6][7][8][9][10] Some evidence shows HDHPs decrease valuable medical service utilization and worsen health; other studies show no effects on health and that patients disproportionately reduce potentially wasteful health services. [11][12][13][14][15][16][17][18] An impediment to research on HDHPs is the lack of data about plan structure. Administrative claims data, ideal for research, often come in two types.…”

“… 6 , 7 , 8 , 9 , 10 Some evidence shows HDHPs decrease valuable medical service utilization and worsen health; other studies show no effects on health and that patients disproportionately reduce potentially wasteful health services. 11 , 12 , 13 , 14 , 15 , 16 , 17 , 18 …”