Reference pricing changes consumers' choices

August 23, 2013
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.

Explore further: Study finds difficulty obtaining pricing, varying costs for total hip replacement

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

Related Stories

Transparency key to improving value care for patients

May 29, 2013

(HealthDay)—In order to ensure the provision of higher quality care and cost control in a post-Affordable Care Act health care system, data on price, utilization, and quality should be made publicly available unless there ...

Recommended for you

Frequent nut consumption associated with less inflammation

July 29, 2016

In a study of more than 5,000 people, investigators from Brigham and Women's Hospital have found that greater intake of nuts was associated with lower levels of biomarkers of inflammation, a finding that may help explain ...

0 comments

Please sign in to add a comment. Registration is free, and takes less than a minute. Read more

Click here to reset your password.
Sign in to get notified via email when new comments are made.