title: Consumer Choice Between Hospital-Based and Freestanding Facilities for Arthroscopy: Impact on Prices, Spending, and Surgical Complications.
abstract: BACKGROUND
  Hospital-based outpatient departments traditionally charge higher prices for ambulatory procedures, compared with freestanding surgery centers. Under emerging reference-based benefit designs, insurers establish a contribution limit that they will pay, requiring the patient to pay the difference between that contribution limit and the actual price charged by the facility. The purpose of this study was to evaluate the impact of reference-based benefits on consumer choices, facility prices, employer spending, and surgical outcomes for orthopaedic procedures performed at ambulatory surgery centers.
  
  
  METHODS
  We obtained data on 3962 patients covered by the California Public Employees' Retirement System (CalPERS) who underwent arthroscopy of the knee or shoulder in the three years prior to the implementation of reference-based benefits in January 2012 and on 2505 patients covered by CalPERS who underwent arthroscopy in the two years after implementation. Control group data were obtained on 57,791 patients who underwent arthroscopy and were not subject to reference-based benefits. The impact of reference-based benefits on consumer choices between hospital-based and freestanding facilities, facility prices, employer spending, and surgical complications was assessed with use of difference-in-differences multivariable regressions to adjust for patient demographic characteristics, comorbidities, and geographic location.
  
  
  RESULTS
  By the second year of the program, the shift to reference-based benefits was associated with an increase in the utilization of freestanding ambulatory surgery centers by 14.3 percentage points (95% confidence interval, 8.1 to 20.5 percentage points) for knee arthroscopy and by 9.9 percentage points (95% confidence interval, 3.2 to 16.7 percentage points) for shoulder arthroscopy and a corresponding decrease in the use of hospital-based facilities. The mean price paid by CalPERS fell by 17.6% (95% confidence interval, -24.9% to -9.6%) for knee procedures and by 17.0% (95% confidence interval, -29.3% to -2.5%) for shoulder procedures. The shift to reference-based benefits was not associated with a change in the rate of surgical complications. In the first two years after the implementation of reference-based benefits, CalPERS saved $2.3 million (13%) on these two orthopaedic procedures.
  
  
  CONCLUSIONS
  Reference-based benefits increase consumer sensitivity to price differences between freestanding and hospital-based surgical facilities.
  
  
  CONCLUSIONS
  This study shows that the implementation of reference-based benefits does not result in a significant increase in measured complication rates for those subject to reference-based benefits.
authors.affiliation: School of Public Health, University of California, 50 University Hall, MC7360, Berkeley, CA 94720-7360. E-mail address for J.C. Robinson: James.robinson@berkeley.edu.
authors.forename: James C
authors.initials: JC
authors.lastname: Robinson
authors.affiliation: School of Public Health, University of California, 50 University Hall, MC7360, Berkeley, CA 94720-7360. E-mail address for J.C. Robinson: James.robinson@berkeley.edu.
authors.forename: Timothy T
authors.initials: TT
authors.lastname: Brown
authors.affiliation: School of Public Health, University of California, 50 University Hall, MC7360, Berkeley, CA 94720-7360. E-mail address for J.C. Robinson: James.robinson@berkeley.edu.
authors.forename: Christopher
authors.initials: C
authors.lastname: Whaley
authors.affiliation: Dell Medical School, University of Texas, 1912 Speedway, Suite 564, Austin, TX 78712.
authors.forename: Kevin J
authors.initials: KJ
authors.lastname: Bozic
mesh_terms: D000328:Adult; D000368:Aged; D000554:Ambulatory Care Facilities / Q000191:economics / Q000706:statistics & numerical data; D000556:Ambulatory Surgical Procedures / Q000191:economics* / Q000379:methods; D001182:Arthroscopy / Q000191:economics* / Q000379:methods; D002140:California; D003362:Cost-Benefit Analysis; D016208:Databases, Factual; D005260:Female; D017048:Health Care Costs; D006801:Humans; D007719:Knee Joint / Q000503:physiopathology / Q000601:surgery*; D008297:Male; D008875:Middle Aged; D015999:Multivariate Analysis; D057240:Patient Preference / Q000191:economics* / Q000706:statistics & numerical data; D012044:Regression Analysis; D012189:Retrospective Studies; D012785:Shoulder Joint / Q000503:physiopathology / Q000601:surgery*; D014481:United States