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|Provider Reference Pricing - Components, Examples and Implications|
pricing often varies widely, even for identical services within a
limited geographic area, with no correlation to quality. Seemingly
illogical pricing inconsistencies, together with the opacity of pricing
and quality data - where reliable data exist at all, have historically
been a barrier to price competition in the provider sector.
Reference pricing, long used in Europe to manage prescription drug costs, may offer a way to standardize costs and empower consumers to make more-informed healthcare choices. Under reference pricing, a payer caps the amount it will pay for a given procedure. Patients who choose a provider that stays within that cap are responsible only for their customer cost-sharing requirements set forth by their plan. Those who go with a more expensive provider will also owe the difference between the reference price as determined by the payer and the amount charged. That difference is not counted toward their annual out-pocket maximums.
Reference pricing models lend themselves most readily to commodity health care services, which account for one-third of total health care spending. These are routine non-urgent procedures where quality is more likely to be uniform, and the risk of complications negligible. While elements of reference pricing currently exist in the United States, significant potential remains for more robust deployment of the model.
Please join us in this special HealthcareWebSummit 30-minute edition with Kurt Salmon's Leslie Marshburn, on Thursday, September 24th, 2015 at 1PM Eastern, as she discusses components and implications of reference pricing, current use of reference pricing in the U.S., and how reference pricing can be structured on a more widespread basis. Click here for detailed information and to register or call 209.577.4888.
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