Oregon plan cost-sharing cap ate 85% of hospital pay limit savings: Study

Managers of the Oregon State Employee Plan learned something after the state capped hospital prices and the plan used the projected savings to lower plan participants’ out-of-pocket costs: Lowering the out-of-pocket costs increased the amount of care the participants used.

Oregon limited hospitals to charging patients 200% of what Medicare pays. The limit took effect in October 2019.

Roslyn Murray, a Brown University researcher, and two other researchers studied the effects of the collision of the hospital fee cap and the out-of-pocket cost reductions by comparing hospital bill data for Oregon educators with hospital bills for educators who were enrolled in commercial health insurance plans rather than the main state employee plan.

The hospital billing rules reduced costs by $6.60 procedure, but the plan received about one extra procedure claim for every four enrollees, according to a paper the researchers published in JAMA Health Forum, an American Medical Association journal.

The study team found that increases in use of care because of the cost-sharing reductions absorbed $10.3 million of the $12.1 million in savings created by the hospital bill cap.

Related: Expanding pre-deductible coverage in HSAs boosts adherence to certain medications

Some health policymakers and watchers have argued that cost-sharing bills have increased enough to keep even workers with solid employer-sponsored health coverage from getting all of the recommended preventive care and routine sick care.

“The study findings suggest that enrollees may benefit from reduced out-of-pocket spending due to hospital price regulations, but states should be mindful that price regulations may inadvertently increase health care service use,” Murray and her colleagues wrote.