Reference Pricing Changes The 'Choice Architecture Of Health Care For Consumers [Innovations In Benefit Design]

This article summarizes reference pricing’s impacts to date on patient choice, provider prices, surgical complications, and employer spending and estimates its potential impacts if expanded to more services and a broader population. Reference pricing induces consumers to select lower-price alternatives for all of the forms of care studied, leading to significant reductions in prices paid and spending incurred by insurers and employers. The impact on consumer cost sharing is mixed, with some studies finding higher copayments and some lower. We conclude with a discussion of the incentives created for providers to redesign their clinical processes and for efficient providers to expand into price-sensitive markets. Over time, reference pricing may increase pressures for price competition and lead to further cost-reducing innovations in health care products and processes.

Source: Health Affairs - March 5, 2017 Category: Global & Universal Authors: Robinson, J. C., Brown, T. T., Whaley, C. Tags: Consumer Issues Innovations In Benefit Design Source Type: research