Oregon Payment Regulations Led to Reductions in Enrollee Cost-Sharing and Increases in Service Use


The U.S. spends far more than other industrialized countries on health care. The burden of high and rising health care spending falls primarily on U.S. individuals and families through higher cost-sharing, higher premiums, and wage stagnation. Research suggests that price regulation may be the most promising approach to contain health care spending. Our earlier work found that hospital price regulations in Oregon led to 107.5 million dollars in savings for the state employee plan in the first 27 months of the policy. A key question that remains is whether the savings generated from these payment caps are passed on to enrollees in the state employee plan in the form of lower cost-sharing. We find that the hospital payment cap led to a 9.5 percent reduction in out-of-pocket spending per outpatient procedure and a 2.5 percent increase in the number of outpatient procedures per enrollee per year for Oregon educators receiving outpatient services in the post-period. We estimate that the hospital payment cap led to 2.1 million dollars in savings for Oregon educators that received outpatient facility services from October 2019 through December 2021. However, increases in service use led to 4.4 million dollars less in savings to the plan.