Exploring Reference-Based Pricing as a Method for Lowering Healthcare Costs

September 18, 2019

Reference-based pricing has been touted as a way to contain healthcare costs while ensuring quality of care. We talk with with David Henka, chief executive officer of ActiveRADAR, to dig deeper into how the method is used in practice and what program results have shown.

Reference-based pricing has been touted as a way to contain healthcare costs while ensuring quality of care. When implemented, health plans or employers compare the costs of all brand-name and generic drig options within a certain therapeutic category and identify the lowest cost options. From there, copays are adjusted to encourage the use of the lowest cost alternatives, with plans covering the cost of a drug or service up until the reference point.

With research showing that these programs can reduce costs by an average 20% each year, we sat down with David Henka, chief executive officer of ActiveRADAR, to dig deeper into how the method is used in practice and what program results have shown.

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