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the patient was responsible for the final $ 10,000. Initially 41 of the hundreds of hospitals provided knee and hip replacement procedures at or below the RP with acceptable quality. Some hospitals charged more than $ 100,000. Multiple studies found that patients sought out the lower cost facilities. Prices for knee and hip replacements and cataract surgery fell by an average 20%. Other procedures fell by similar percentages. Many higher price facilities lowered their prices. Quality was apparently unaffected. By contrast, prices paid by employer-sponsored plans rose by about 5.5 percent.
34:"Reference price" in this context is distinct from its use in behavioral pricing scholarship. In that literature, a "reference price" refers to a mental standard of comparison or a posted statement of "normal" prices used to judge whether an offered price is good deal – as in "Was $ 100, now $ 70." Reference prices in this context are related to work by Nobel Prize winner
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On May 2, 2014, the Obama administration published its approval for large/self-insured firms to use RP for health care services and to use the price of generic drugs as the RP for other drugs, which would encourage patients to favor generics over non-generics. Costs that exceed the RP are not counted
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In health care, a more common alternative is to limit patients to a specific network of providers who have accepted the pricing and other terms specified by the insurer. RP provides consumers a broader choice of providers. Further, some large employers contract with regional "centers of excellence,"
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and other elective procedures. For example, the RP for a knee or hip replacement surgery was $ 30,000. As before, the patient was responsible for 20 percent of the first $ 15,000, paying a maximum of $ 3,000. The insurer covered the next $ 15,000. However, if the procedure cost $ 40,000,
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Some insurers use reference pricing to reduce their provider costs. The insurer announces prices that it is willing to pay for specific surgical procedures, pharmaceuticals and other services. If the provider charges a higher price, the patient is responsible for the balance. One study
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RP requires consumers to have access to price and quality information, which is not general practice in many industries. Further, it does not help consumers with urgent needs, cognitive and/or other impairments.
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Reference pricing requires sufficient competition. Otherwise, consumers have no choice about providers, who in turn face less pricing pressure. Reference pricing could encourage lower quality.
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Lichtenstein, Donald R., Scot Burton, and Eric J. Karson. "The effect of semantic cues on consumer perceptions of reference price ads." Journal of
Consumer Research 18, no. 3 (1991): 380–391.
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Niedrich, Ronald W., Subhash Sharma, and
Douglas H. Wedell (2001). "Reference price and price perceptions: A comparison of alternative models." Journal of Consumer Research 28 (3): 339–354.
143:. It is a monthly, weighted average of the consumer price in Alberta and a price at the Alberta border, with transporting and marketing adjustments. The system became effective in 1994.
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estimated that about 40 percent of health care spending is for services for which patients could shop. Appropriate services include hip and knee replacement, colonoscopy,
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Kalyanaram, Gurumurthy, and
Russell S. Winer(1995). Empirical generalizations from reference price research. Marketing Science, 14(3_supplement), G161-G169.
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Acosta, A; Ciapponi, A; Aaserud, M; Vietto, V; Austvoll-Dahlgren, A; Kösters, JP; Vacca, C; Machado, M; Diaz Ayala, DH; Oxman, AD (16 October 2014).
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24:) is the price that a purchaser announces that it is willing to pay for a good or service. It is used by high-volume purchasers to inform suppliers.
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CalPERS reduced cost-sharing for patients who chose a (lower cost) outpatient surgical center, instead of a (higher cost) hospital.
243:"Reference Pricing for Health Care Services: A New Twist on the Defined Contribution Concept in Employment-Based Health Benefits"
87:, to compare the national drug prices against other countries' or other formulations of a similar therapeutic class.
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Thaler, Richard (1985)"Mental accounting and consumer choice." Marketing science 4, no. 3 (1985): 199–214
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because they have relatively uniform protocols and are less likely to experience variation in quality.
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265:"Pharmaceutical policies: effects of reference pricing, other pricing, and purchasing policies"
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346:"7 Things You Should Know About The Next Big Benefit Change"
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101:California Public Employees' Retirement System
318:Generics and Biosimilars Initiative Journal
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312:Dylst, Pieter (15 August 2012).
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241:Fronstin, Paul (April 2014).
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135:The Canadian province of
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369:. Government of Alberta.
367:"Alberta Price History"
109:hip replacement surgery
62:computerized tomography
271:(Systematic review).
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391:Health care reform
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141:natural gas
113:arthroscopy
51:Health care
380:Categories
352:2016-08-19
320:(Review).
191:2016-08-19
147:References
186:0362-4331
299:25318966
250:ebri.org
99:In 2011
76:such as
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137:Alberta
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131:Energy
246:(PDF)
295:PMID
273:2019
182:ISSN
107:and
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285:PMC
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