Reference Prices May Have Limited Potential for Savings, Report Says

Reference prices, a health benefit strategy that requires patients to pay costs above a set price, may save employers and patients money, but their potential may be limited-perhaps even more so under the Patient Protection and Affordable Care Act.

Reference prices, a health benefit strategy that requires patients to pay costs above a set price, may save employers and patients money, but their potential may be limited—perhaps even more so under the Patient Protection and Affordable Care Act.

The California Public Employees' Retirement System and WellPoint subsidiary Anthem adopted a $30,000 reference price for scheduled hip and knee surgeries in 2011. The switch saved CalPERS $2.8 million that year and prompted some hospitals to drop their prices to be competitive, according to a newly released paper by the Center for Studying Health System Change.

But it may be difficult to repeat those results elsewhere, wrote the center's Amanda Lechner, Rebecca Gourevitch and Paul Ginsburg. Meanwhile, the financial incentive that reference prices create to avoid high-priced hospitals may be undermined by the Affordable Care Act.

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Source: Modern Healthcare