Screening for cancers saves lives. Mammogram is the screening for breast cancer, which reduces number of death from the disease (USPSTF, 2016). Unfortunately, half of the women do not get this life-saving test. Two most significant barriers in receiving the screening are the cost and the lack of insurance coverage (Cappon, 2014). It is important to diagnose breast cancer yearly, because the survival rate dramatically improved with early detection. The later the cancer is detected, the more difficult and expensive its treatment, and higher the mortality rate. Majority of women, over 90 %, survive the breast cancer for at least 5 years when diagnosed early, versus only 15% who survive the later diagnosis (Kakushadze, Raghubanshi & Yu 2017).
Insurance companies manage the cost associated with the illnesses such as breast cancer. Therefore, keeping people healthy has become the major driver of implementing an incentives programs (Gruessner, 2015). Costs of the medical services vary dramatically between providers even in the same geographical area. Majority of consumers are not aware of the procedure prices in advance. Some health insurance companies begun to reward their members for choosing lower cost providers (Moukheiber, 2015). Non- and for- profit startups jumped on the idea of saving insurance companies money by assisting members in making wiser-cheaper choices. The members win by getting some money back, while the insurance companies save millions. In 2014, one such company – Vitals – saved health plans almost 11 million, while paying members over 1 million in incentives (Moukheiber, 2015).
Economic impact of the rebate for visiting a lower-cost, high quality provider for a screening mammogram could save millions of dollars to the health plans that in return may lower the premiums (Beaton, 2018). This trend also puts pressure on high cost providers to become more price competitive (Moukheiber, 2015). In addition, the radiology centers will become more price elastic. However, the higher demand for the lower cost services will ultimately drive the price increase of those services (Figure 5-3). In addition, as the hospitals, who are the high cost providers, will see decrease in demand of their services, they will be have to reduce salaries, stop providing some services, and reduce the expenditure of services. Decrease in demand of the hospital services will lead to decrease in demand of health care providers (doctors and nurses), which will have negative implication in other area of economy, like the educational sector (Feldstein, 2012).