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

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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