Association of Reference Payment for Colonoscopy With Consumer Choices, Insurer Spending, and Procedural Complications.
OBJECTIVE
Regulatory limits on consumer cost sharing permit wide variation in the prices charged for screening and diagnostic tests such as colonoscopy. Employers are experimenting with reference payment initiatives that offer full insurance coverage at low-priced facilities but require substantial cost sharing if patients select high-priced alternatives.


OBJECTIVE
To ascertain the effect of reference payment on facility choice, insurer spending, consumer cost sharing, and procedural complications for colonoscopy.


METHODS
The California Public Employees' Retirement System (CalPERS) implemented reference payment in January 2012. We obtained data on 21 644 CalPERS enrollees who underwent colonoscopy in the 3 years prior to implementation and on 13 551 patients in the 2 years after implementation. Control group data were obtained on 258 616 Anthem Blue Cross enrollees who underwent colonoscopy and who were not subject to reference payment initiatives during this 5-year period.


METHODS
Consumer choice of facility, price paid per procedure, total insurer spending, consumer cost sharing, and procedural complications.


METHODS
Choices, prices, and complications were compared for CalPERS and Anthem patients before and after implementation of reference payments, using difference-in-difference multivariable regressions to adjust for patient demographic characteristics and comorbidities, procedure indications, and geographic location.


RESULTS
Utilization of low-priced facilities for CalPERS members increased from 68.6% in 2009 to 90.5% in 2013. After adjusting for patient demographic characteristics, comorbidities, and other factors, the implementation of reference payment increased use of low-priced facilities by 17.6 percentage points (95% CI, 11.8 to 23.4; P < .001). The mean price paid for colonoscopy for the CalPERS population increased from $1587 (95% CI, $1555-$1618) in 2009 to $1716 (95% CI, $1678-$1753) in 2011 and then decreased to $1508 (95% CI, $1469-$1548) in 2013 for patients subject to reference payment. After adjustment for other relevant factors, reference payment was responsible for a 21.0% (95% CI, -26.0% to -15.6%, P < .001) reduction in the price. Reference payment was associated with a small but statistically insignificant decline in procedural complications, from 2.1% in 2009 to 2.0% in 2013 (P = .47). In the first 2 years after implementation, CalPERS saved $7.0 million (28%) on spending for the procedure.


CONCLUSIONS
Implementation of reference payment for colonoscopy was associated with reduced spending and no change in complications.
School of Public Health, University of California-Berkeley.
James C
JC
Robinson
School of Public Health, University of California-Berkeley.
Timothy T
TT
Brown
School of Public Health, University of California-Berkeley.
Christopher
C
Whaley
Department of Surgery, Division of General Surgery, University of California-San Francisco3Department of Medicine, Division of Geriatrics, University of California-San Francisco.
Emily
E
Finlayson
D000368:Aged; D002140:California; D003113:Colonoscopy / Q000009:adverse effects / Q000191:economics / Q000379:methods; D003365:Costs and Cost Analysis / Q000379:methods*; D004180:Direct Service Costs / Q000706:statistics & numerical data; D005260:Female; D006268:Health Facilities / Q000191:economics*; D006801:Humans; D019458:Insurance Coverage; D008297:Male; D008875:Middle Aged