Oregon’s Hospital Price Cap Policy Cuts Patients’ Out-of-Pocket Costs, Bumps Utilization

An Oregon policy capping maximum hospital payments appeared to reduce patients’ out-of- pocket spending, though its state health plan’s savings were fettered by a resulting increase in utilization, reports Fierce Healthcare. Starting in October 2019, a state law applying to 24 of Oregon’s largest hospitals and members of the Oregon State Employee plan began restricting in-network hospital prices to 200 percent of Medicare and out-of-network prices at 185 percent. Researchers found that plan members’ average out-of-pocket spending per outpatient procedure dropped by 9.5 percent compared to control during the 27-month post- implementation study period, and a 4.8 percent increase in outpatient procedures per enrollee per year. the researchers estimated $1.8 million in out-of-pocket savings for the plan members associated with 27 months of the price cap policy (or about $800,000 annually). The increase in utilization led to lost plan savings of $10.3 million over 27 months ($4.6 million annually) – though, even with the service use increases, the price cap generated tens of millions in annual plan savings.