# Analysis of a Tiered Clinic Cost-sharing Health Insurance Benefit Design

> **NIH AHRQ R01** · UNIVERSITY OF MINNESOTA · 2024 · $385,748

## Abstract

PROJECT SUMMARY/ABSTRACT
 The discrepancy between health spending and outcomes in the United States compared to other developed
countries suggests persistent inefficiency in the nation's health systems. Current provider payment systems often
inadvertently penalize, rather than reward, providers who produce better health outcomes at lower cost. One
approach to improving efficiency is to give consumers information about higher-quality, lower-cost providers and
financial incentives to choose them. Tiered cost-sharing is one such health insurance benefit design that provides
information and incentives to patients, thereby rewarding efficient providers with greater patient volume.
 This study will examine one of the longest-running tiered cost sharing systems in the United States – the
State Employee Group Insurance Program Minnesota Advantage health plan (SEGIP). The SEGIP plan covers
130,000 State employees and their dependents across the state, which includes dense urban centers and
remote rural areas. Each year SEGIP employees select a primary care “gatekeeper” clinic that is responsible for
coordinating the entirety of their care, including referrals to specialists and hospitals, and pharmaceuticals.
Clinics are assessed on their risk-adjusted total cost of care and placed into one of four cost-sharing tiers. The
cost-sharing differentials are substantial, giving consumers a strong incentive to choose lower-cost clinics.
 We have addressed some of the initial questions regarding consumer responses to tiering in research funded
by the Robert Wood Johnson and Donaghue Foundations. In this proposal, we move to the next step to
investigate responses of clinic leaders to inclusion in a tiered cost-sharing system. We will use both quantitative
and qualitative methods as part of a triangulation mixed methods design. Our research will assess what actions
clinic leaders have taken in response to inclusion in a tiered cost-sharing system, how they think strategically
about tiered cost-sharing, and what barriers they face as they try to practice more efficiently.

## Key facts

- **NIH application ID:** 10889071
- **Project number:** 5R01HS026898-03
- **Recipient organization:** UNIVERSITY OF MINNESOTA
- **Principal Investigator:** BRYAN Edwin DOWD
- **Activity code:** R01 (R01, R21, SBIR, etc.)
- **Funding institute:** AHRQ
- **Fiscal year:** 2024
- **Award amount:** $385,748
- **Award type:** 5
- **Project period:** 2022-08-05 → 2026-01-31

## Primary source

NIH RePORTER: https://reporter.nih.gov/project-details/10889071

## Citation

> US National Institutes of Health, RePORTER application 10889071, Analysis of a Tiered Clinic Cost-sharing Health Insurance Benefit Design (5R01HS026898-03). Retrieved via AI Analytics 2026-05-24 from https://api.ai-analytics.org/grant/nih/10889071. Licensed CC0.

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