Richard Stephenson

Expert: How Reference Pricing and Consumerism Reduce Healthcare Costs

Reference pricing leverages a shopping model with an allowance component to give employees an incentive for comparing providers for particular procedures by shifting any costs above a target price to the patient. It’s a consumerism approach that encourages employees to become informed about their healthcare especially with respect to costs.  The Employee Benefits Research Institute estimates industry-wide savings of $9.4 billion or 1.6% of total aggregate US healthcare spend, so it has the potential to lower healthcare costs for the country. Blue Cross Blue Shield developed the shopping model in 2011 for the California Public Employees Retirement System (CalPers) and… Full Story