A study suggests that changing the way one health insurer pays providers could affect patients covered by other insurers as well. In the US healthcare system, healthcare providers typically treat patients who are covered by a variety of health insurers. Changing the way one insurer pays providers might induce changes in provider behavior that affect patients covered by other insurers. To test this hypothesis, Amy Finkelstein and colleagues examined the Comprehensive Care for Joint Replacement (CJR) program, a nationwide randomized trial of a payment reform for Traditional Medicare (TM), the US public health insurance program for the elderly and disabled. Under CJR, TM pays hospitals in 67 randomly assigned treatment metropolitan areas for hip and knee replacement episodes with a single bundled payment, while paying hospitals in 104 control metropolitan areas for these episodes under a traditional fee-for-service basis. During the first 2 years of the program, the authors found that in treatment hospitals, the share of patients discharged to skilled nursing facilities, inpatient rehabilitation facilities, or long-term care hospitals was lower than in control hospitals. The magnitude of the difference was similar for both TM patients and for patients covered by private insurance through Medicare Advantage. The results suggest that reforming payments for TM patients had spillover effects on patients not covered by TM, according to the authors.
Article #20-04759: "Randomized trial shows healthcare payment reform has equal-sized spillover effects on patients not targeted by reform ," by Liran Einav, Amy N. Finkelstein, Yunan Ji, and Neale Mahoney.
MEDIA CONTACT: Amy N. Finkelstein, Massachusetts Institute of Technology, Cambridge, MA; tel: 617-253-4149; e-mail: afink@mit.edu
###
Proceedings of the National Academy of Sciences