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

Suddenly health insurance is not for sale

16 hours ago

(HealthDay)— Darlene Tucker, an independent insurance broker in Scotts Hill, Tenn., says health insurers in her area aren't selling policies year-round anymore.

Study: Half of jailed NYC youths have brain injury (Update)

17 hours ago

About half of all 16- to 18-year-olds coming into New York City's jails say they had a traumatic brain injury before being incarcerated, most caused by assaults, according to a new study that's the latest in a growing body ...

Autonomy and relationships among 'good life' goals

Apr 18, 2014

Young adults with Down syndrome have a strong desire to be self-sufficient by living independently and having a job, according to a study into the meaning of wellbeing among young people affected by the disorder.

User comments