COPAYMENT LEVELS AND THEIR

INFLUENCE ON PATIENT BEHAVIOR IN EMERGENCY ROOM UTILIZATION IN AN HMO POPULATION

Class Panel Presentation for MGT 798/398 Winter, 2011-2012

B Y : K A R E N A G A LV I N , B E N G A R R I S O N , A N D S T E L L A SHARMOUN

OUTLINE

ERs are Overcrowded!

Can Insurance Companies Change Patient Behavior?

Are there other Factors and Influences on Behavior?

WHY ARE ERS OVERCROWDED?

Conveniences Physicians clinical appointments correlate with traditional daytime hours when many people are at work. Lack of evening and weekend hours. When children are at daycare or school parents are not aware of their childrens illness ER Hospitals and HMO copayments
Yaremchuk, K., Schwartz, J., & Nelson, M. (2010). Copayment levels and their influence on patient behavior in emergency room utilization in an HMO population. Journal of Managed Care Medicine, 13, 27 31.

WHY ARE ERS OVERCROWDED?

The Effects of ER Hospitals Being Overcrowded Becoming more expensive Patients avoid Medical care Quality of care decreases

Gruber, J. (2006). The role of consumer copayment's for healthcare:lessons from the rand health insurance experiment and beyond. (pp. 1-18). Menlo Park, CA: The Henry J. Kaiser Family Foundation.

WHY ARE ERS OVERCROWDED?

Emergent and Non-emergent Level of Copayments
35% 30% 25% 20% 15% 10% 5% 0% 0 $10 to $40 $51 to $52 $75 $100 to $ 150

Yaremchuk, K., Schwartz, J., & Nelson, M. (2010). Copayment levels and their influence on patient behavior in emergency room utilization in an HMO population. Journal of Managed Care Medicine, 13, 27 31.

WHY ARE ERS OVERCROWDED?

Competition Insurance companies attract new customers Low Copayments

Yaremchuk, K., Schwartz, J., & Nelson, M. (2010). Copayment levels and their influence on patient behavior in emergency room utilization in an HMO population. Journal of Managed Care Medicine, 13, 27 31.

CAN INSURANCE COMPANIES CHANGE PATIENTS BEHAVIOR THROUGH COPAYMENTS?

Study to Determine the Effects of Co-Pays on ER utilization rates
Study By Henry Ford Medical Group and the Health Alliance Plan HMO (HAP)

HAP was largest Health Maintenance Organization in Michigan

HAP members had the highest ER Utilization rates in MI 346 Visits/ 1,000 members

HAP had largest percentage of patients with $0 ER Co-Pays 44%

Yaremchuk, K., Schwartz, J., & Nelson, M. (2010). Copayment levels and their influence on patient behavior in emergency room utilization in an HMO population. Journal of Managed Care Medicine, 13, 27 31.

CAN INSURANCE COMPANIES CHANGE PATIENTS BEHAVIOR THROUGH COPAYMENTS?

Study to Determine the Effects of Co-Pays on ER utilization rates

HAP reassigned Co-Pay levels for patients* 0$ -> $10 -> $25 -> $30 -> $40 -> $50 -> $52 -> $75 -> $100 -> $150 *Co-Pay was waived if ER visit resulted in Hospital Stay Plan Members were notified of changes through various methods Tracked ER Utilization rates among members for next 2 years Maintained policy that preauthorization for ER visits unnecessary Patients still encouraged to go to closest ER when emergency arises

Made Distinctions between Emergent and Non-Emergent Conditions using ICD-9 Codes
Analyzed results to determine effects..

Yaremchuk, K., Schwartz, J., & Nelson, M. (2010). Copayment levels and their influence on patient behavior in emergency room utilization in an HMO population. Journal of Managed Care Medicine, 13, 27 31.

CAN INSURANCE COMPANIES CHANGE PATIENTS BEHAVIOR THROUGH COPAYMENTS?

In 2005 - $0 Co-Pay = 346 Visits per 1000 Members 2007 Results
ER VISITS PER THOUSAND
CO-PAY 2007 emergent visits 2007 non-emergent visits 2007 All visits

$0 $ 10-$40

297 249

113 101

411 350

$50
$75 $100-$150

208
179 165

65
56 43

274
235 208

Yaremchuk, K., Schwartz, J., & Nelson, M. (2010). Copayment levels and their influence on patient behavior in emergency room utilization in an HMO population. Journal of Managed Care Medicine, 13, 27 31.

CAN INSURANCE COMPANIES CHANGE PATIENTS BEHAVIOR THROUGH COPAYMENTS?

The Magic Number is $50
30-45% reduction in emergent visits 42-62% reduction in non-emergent visits

Overall ER reduction of 33-49% for patients with co-pays of $50-$150

Numbers reflect important cost differential between ER and Physician visit co-pays
Average Physician Visit Co-pay is $15-20 $50 ER Co-pay represents > 50% increase

Yaremchuk, K., Schwartz, J., & Nelson, M. (2010). Copayment levels and their influence on patient behavior in emergency room utilization in an HMO population. Journal of Managed Care Medicine, 13, 27 31.

CAN INSURANCE COMPANIES CHANGE PATIENTS BEHAVIOR THROUGH COPAYMENTS?

Results from Similar Studies:
1970s RAND Study First documentation that introduction of ER co-pays decreased utilization by 20%* 1996 Kaiser Permanente HMO Study in Northern CA showed 15% decline in ER utilization after introducing co-pays of $25-$35* 2006 Kaiser Permanente HMO Reported 12% Decrease in ER Utilization with $20$35 Co-pay , and 23% Decrease with $50-$100 Co-pay* Several other Reports concluded that Increased Co-pays did NOT lead to increase in unfavorable results, and patients did NOT find alternatives to medical care*

Yaremchuk, K., Schwartz, J., & Nelson, M. (2010). Copayment levels and their influence on patient behavior in emergency room utilization in an HMO population. Journal of Managed Care Medicine, 13, 27 31. *Additional Sources Cited at end

OTHER INFLUENCES ON PATIENT BEHAVIOR

Even if patients have financial incentive to change behavior, other factors are working for or against them: Financial Incentives to Physicians Insurance Plan Design for Sales Hospitals Seeking to Retain Revenue
Yaremchuk, K., Schwartz, J., & Nelson, M. (2010). Copayment levels and their influence on patient behavior in emergency room utilization in an HMO population. Journal of Managed Care Medicine, 13, 27 31.

OTHER INFLUENCES ON PATIENT BEHAVIOR

Financial Incentives to Physicians
MCOs implementing incentive programs to reduce costs, increase quality Data collection and analysis used to improve usage rates Blue Cross Blue Shield results Extended office hours, patient education on treatment plan
Blue Cross Blue Shield of Michigan (2012). Physician group incentive program. Retrieved from http://www.bcbsm.com/provider/value_partnerships/pgip/

OTHER INFLUENCES ON PATIENT BEHAVIOR

Insurance Plan Design for Sales
Sales team designs products to entice and keep members Plans without higher ER copayments are more favorable Other factors include deductible, drug benefits Employers choose plan design, not employees

Yaremchuk, K., Schwartz, J., & Nelson, M. (2010). Copayment levels and their influence on patient behavior in emergency room utilization in an HMO population. Journal of Managed Care Medicine, 13, 27 31.

OTHER INFLUENCES ON PATIENT BEHAVIOR

Hospitals Seeking to Retain Revenue Retail clinics vs. hospital clinics ED is key source of admissions Low-acuity, insured patients are profitable Promotion of accessibility and convenience

Yaremchuk, K., Schwartz, J., & Nelson, M. (2010). Copayment levels and their influence on patient behavior in emergency room utilization in an HMO population. Journal of Managed Care Medicine, 13, 27 31.

OTHER INFLUENCES ON PATIENT BEHAVIOR

Multimedia Promotion of ER Wait Times

Edward Hospital & Health Services. (2011). Edward ER Wait Times (Version 1.1) [Mobile application software]. Retrieved from http://itunes.apple.com/ Edward Hospital & Health Services. (2012). Retrieved from http://www.edward.org/

CONCLUSIONS
ER Overcrowding Continues to be an issue Co-Payments are proven to help reduce ER utilization rates, particularly for non-emergent conditions The $50 fee appears to be the co-payment level at which patient demand for ER services is most effected There are a number of other influences on patient behavior that must be addressed as well

SOURCES
Blue Cross Blue Shield of Michigan (2012). Physician group incentive program. Retrieved from http://www.bcbsm.com/provider/value_partnerships/pgip/ Edward Hospital & Health Services. (2011). Edward ER Wait Times (Version 1.1) [Mobile application software]. Retrieved from http://itunes.apple.com/ Edward Hospital & Health Services. (2012). Retrieved from http://www.edward.org/ Gruber, J. (2006). The role of consumer copayment's for healthcare:lessons from the rand health insurance experiment and beyond. (pp. 1-18). Menlo Park, CA: The Henry J. Kaiser Family Foundation. Hsu, J., Fung, V., Brand, R., Selby, J., Fireman, B., Newhouse, J., & Reed, M. (2004). Cost-sharing: Patient knowledge and effects on seeking emergency department care. Med Care, 42, 290-296. Reed, M., Fung, V., Brand, R., Ray, G., Fireman, B., Newhouse, J., Selby , J., & Hsu, J. (2005). Care-seeking behavior in response to emergency department copayments. Med Care, 43, 810-816. Yaremchuk, K., Schwartz, J., & Nelson, M. (2010). Copayment levels and their influence on patient behavior in emergency room utilization in an HMO population. Journal of Managed Care Medicine, 13, 27 31.