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Sometimes you can to spend a little to save a lot. Even if you're the health-insurance industry.
A program that actually makes payments to patients if they agree to get treatment from less-expensive health providers saved eight health plans almost $12 million in 2015, according to an analysis by the company that manages the program.
The savings seen under a program called SmartShopper translated into a 7-to-1 return on the cash that health plans laid out, according to Vitals, which operates SmartShopper and contracts with plans to help control the medical costs of members.
SmartShopper offers cash to people who opt to get their blood tests, colonoscopies, physical therapies, mammograms and other procedures from less-expensive doctors and hospitals.
The amount of money patients receive varies from as little as $25 for blood work to $500 — per month — for a patient who changed the treatment for rheumatoid arthritis.
The employer-sponsored health plans that use SmartShopper in turn get charged less — often much less — than they would if the patient opted for a higher-cost provider covered by the plan. Vitals said the average dollar amount that plans had saved for per procedure in 2015 when a patient went with a less-expensive option was $625.
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In 2015, the program was used to steer patients who underwent more than 16,800 procedures in six states. Those customers collectively earned $1.46 million in incentive payments and generated almost $12 million in gross savings for their plans, according to Vitals.
The most popular procedures in terms of number of cases, were lab/blood work, with an average incentive paid of $25, followed closely by mammograms, with an average incentive of $38.40, and then MRIs, with an average incentive of $141.45.
Colonoscopies, with an average incentive of $160, and CAT scans, with an average $141 incentive, were the other leading procedures.
Vitals said that overall shopping rates among covered patients increased by 30 percent in 2015. Shopping for certain procedures such as a diagnostic scans and blood work grew by more than 45 percent compared with 2014.
Rob Graybill, vice president of the SmartShopper program, said that lower-cost providers covered by the health plans have the same level of service and quality offered by the pricier providers.
"When the service and quality are the same, there's no reason to choose the higher-priced service," Graybill said. "Even consumers who've met their deductible have a reason to choose the better-value provider when it's tied to a cash incentive."
Vitals said that the procedure that saved the most money cumulatively for health plans was colonoscopies, with $1.8 million in savings for 1,550 cases. That's $1,170 in savings per case.
Remicade therapy for rheumatoid arthritis, which saw just 232 cases used under the SmartShopper program, was the second-leading procedure in terms of cumulative savings for the plans. Health plans saved more than $1.7 million on Remicade therapy, or $7,412 per case, by offering average incentives of just $434 per case, according to Vitals.