The Effect of Hospital Safety Reports and a Tiered Hospital Network on Inpatient Referrals
- Presenter:
Chair: Gloria Bazzoli; Discussant: Jennifer Troyer Tue June 6, 2006 15:30-17:00 Room 325
Recent years have seen a movement towards both ‘consumer directed’ and ‘pay for performance’ programs in health care. Many of these programs utilize ‘tiered networks’ for hospital care, where consumer out-of-pocket co-payments vary based on the hospital chosen. While most of the early tiering efforts were based on hospitals’ charges only, there is an increasing movement towards placing hospitals into tiers based on efficiency and quality/safety indicators. However, little has been published about consumer response to tiered hospital benefits or the impact of tiered networks on hospital admissions and revenues. This paper examines a tiered hospital benefit in a commercially insured employed population. In conjunction with its major labor unions, the Boeing Company instituted the Hospital Safety Incentive (HSI) for union (i.e., hourly) employees enrolled in Boeing’s Traditional Medical Plan (TMP) in July 2004. The TMP is an ERISA self-funded health plan administered for Boeing by Regence Blue Shield of Washington. The HSI is unique because it gives patients a financial incentive to choose hospitals that meet the Leapfrog Group’s three patient safety leaps. While the TMP’s standard coverage for hospital care is 95% of allowed hospital charges (up to the annual out-of-pocket maximum), union beneficiaries enrolled in the TMP can achieve a benefit of 100% for hospital care if admitted to a hospital that meets the Leapfrog standards. Boeing’s actuaries have estimated the average value of the 5% payment to be approximately $450 per admission. We estimate the effect of the HSI on patients’ selection of hospital in two of Boeing’s major employment hubs (Seattle, WA and Wichita, KS). We utilize a pre-post study design and take advantage of the fact that the HSI did not apply to non-union (i.e., salaried) employees. We identify the effect by comparing the change in hospital admissions of hospitalized hourly and salaried beneficiaries after the HSI went into effect. To gauge awareness of the HSI, we also examine differences, pre-post, between hourly and salaried non-hospitalized beneficiaries. We identify enrolled beneficiaries from claims data, and while we examine changes in hospital market shares, our primary outcome variables come from answers collected during a 20 minute telephone survey. The telephone survey was necessary since patients are referred to hospitals by their physicians, and thus it is not clear if admissions decisions are made by patients, physicians, or jointly. Targeted respondents were randomly sampled from four groups in each period (union/non-union, hospitalized/non-hospitalized). The key outcomes include questions regarding the degree to which the patient was involved in the choice of hospital and awareness of the HSI. We completed approximately 1,200 interviews in each period and achieved a 60% survey participation rate…
