Integrating Patient Incentives with Episode-Based Payment.

Area of Science:

• Health Economics
• Healthcare Payment Models
• Patient Financial Behavior

Background:

• Payers are adopting bundled payment models to control healthcare costs by aggregating service fees.
• Bundled payments may incentivize providers to reduce costs, potentially at the expense of patient-preferred, more expensive treatments.
• Existing least-costly-alternative designs can deter patients from choosing necessary expensive care due to high out-of-pocket expenses.

Purpose of the Study:

• To explore aligning bundled payments with benefit designs that encourage cost-consciousness without compromising access to high-cost treatments.
• To propose a novel benefit design that incentivizes patients to consider treatment costs.
• To investigate how shared-savings supplements can mitigate out-of-pocket costs for more expensive alternatives.

Main Methods:

• Conceptual exploration of benefit design modifications integrated with bundled payment structures.
• Introduction of a 'shared-savings supplement' to reward patients for selecting less costly care options.
• Analysis of how this supplement reduces out-of-pocket costs for patients choosing more expensive treatments.

Main Results:

• The proposed shared-savings supplement incentivizes patients to choose lower-cost alternatives by providing a cash reward.
• This mechanism allows patients to opt for more expensive therapies while facing only a modest out-of-pocket cost.
• Shared responsibility for incremental costs between patients and providers can align benefit modifications with bundled payments.

Conclusions:

• A shared-savings supplement, integrated with bundled payments, can encourage cost-conscious decision-making among patients.
• This approach balances cost containment with patient choice and access to preferred, albeit more expensive, medical treatments.
• Collaborative cost-sharing between patients and providers offers a viable strategy for optimizing healthcare spending and patient satisfaction.