Reference pricing changes consumers' choices

Reference pricing changes consumers' choices
Consumer cost sharing resulting from reference pricing redirects patient volumes and reduces hospital prices for orthopedic surgery, according to research published in the August issue of Health Affairs.

(HealthDay)—Consumer cost sharing resulting from reference pricing redirects patient volumes and reduces hospital prices for orthopedic surgery, according to research published in the August issue of Health Affairs.

James C. Robinson, Ph.D., M.P.H., and Timothy T. Brown, Ph.D., from the University of California at Berkeley, evaluated the impact of reference pricing on the use of and prices paid for knee and by members of the California Public Employees' Retirement System (CalPERS) from 2008 to 2012. Enrollees in Anthem Blue Cross were used as a comparison group.

The researchers found that, in the first year after implementation, surgical volumes for CalPERS members increased by 21.2 percent at low-price facilities and decreased by 34.3 percent at high-price facilities. There was a decline of 5.6 percent in prices charged to CalPERS members at low-price facilities, and a decline of 34.3 percent at high-price facilities. In 2011, reference pricing accounted for $2.8 million in savings for CalPERS and $0.3 million in lower cost sharing for CalPERS members.

"This article shows that reference pricing does change consumers' choices and thereby the market shares of low-price and high-price hospitals," the authors write.

More information: Abstract
Full Text (subscription or payment may be required)

add to favorites email to friend print save as pdf

Related Stories

Recommended for you

Study recommends inmate immunity test

17 hours ago

(AP)—Federal experts are recommending that California test inmates for immunity to a sometimes fatal soil-borne fungus before incarcerating them at two Central Valley state prisons where the disease has killed nearly three ...

Down syndrome teens need support, health assessed

Jul 25, 2014

Young adults with Down syndrome experience a range of physical and mental health conditions over and above those commonly reported in children with the condition—and these health problems may significantly ...

Time out for exercise

Jul 25, 2014

University of Queensland researcher has found that restructuring our daily routine to include exercise can have unexpected effects on health.

User comments