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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.
Read the full story here: http://bit.ly/1kjemmn
Source: Modern Healthcare
Managed Care Reflections: A Q&A With A. Mark Fendrick, MD, and Michael E. Chernew, PhD
December 2nd 2025To mark the 30th anniversary of The American Journal of Managed Care (AJMC), each issue in 2025 includes a special feature: reflections from a thought leader on what has changed—and what has not—over the past 3 decades and what’s next for managed care. The December issue features a conversation with AJMC Co–Editors in Chief A. Mark Fendrick, MD, director of the Center for Value-Based Insurance Design and a professor at the University of Michigan in Ann Arbor; and Michael E. Chernew, PhD, the Leonard D. Schaeffer Professor of Health Care Policy and the director of the Healthcare Markets and Regulation Lab at Harvard Medical School in Boston, Massachusetts.
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