How do quality information and cost affect patient choice of provider in a tiered network setting? Results from a survey

Abstract

Objective: To assess how quality information from multiple sources and financial incentives affect consumer choice of physicians in tiered physician networks.

Data source: Survey of a stratified random sample of Massachusetts state employees.

Study design: Respondents were assigned a hypothetical structure with differential copayments for "Tier 1" (preferred) and "Tier 2" (nonpreferred) physicians. Half of respondents were told they needed to select a cardiologist, and half were told they needed to select a dermatologist. Patients were asked whether they would choose a Tier 1 doctor, a Tier 2 doctor, or had no preference in a case where they had no further quality information, a case where a family member or friend recommended a Tier 2 doctor, and a case where their personal physician recommended a Tier 2 doctor. The effects of copayments, recommendations, physician specialty, and patient characteristics on the reported probability of selecting a Tier 1 doctor are analyzed using multinomial logit and logistic regression.

Principal findings: Relative to a case where there is no copayment differential between tiers, copayment differences of U.S.$10-U.S.$35 increase the number of respondents indicating they would select a Tier 1 physician by 3.5-11.7 percent. Simulations suggest copayments must exceed U.S.$300 to counteract the recommendation for a lower tiered physician from friends, family, or a referring physician. Sensitivity to the copayments varied with physician specialty.

Conclusions: Tiered provider networks with these copayment levels appear to have limited influence on physician choice when contradicted by other trusted sources. Consumers' response likely varies with physician specialty.

Figure 1

Hypothetical Tiered Physician Networks

Figure 2

Respondent Choice of Physician (Weighted Frequencies)