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How Do Quality Information and Cost Affect Patient Choice of Provider in a Tiered Network Setting? Results from a Survey

Keywords: Tiered physician networks; provider choice; quality information

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.

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