The benefits and challenges of reference pricing [Special Report]
By Brian Eastwood
In the years since the Affordable Care Act went into effect, and brought with it the concept of value-based care, insurers have introduced a number of initiatives that aim to reduce both consumer and health plan spending without compromising care quality.
Reference pricing is one such initiative: Insurers set a target price for a healthcare service or procedure and if members choose a provider that offers the service for less than the reference price, they pay nothing. If they choose a provider that exceeds the price, they must pay the difference.
When done right, reference pricing can reap savings for both consumers and insurers. For example, Cigna controlled costs by persuading members to choose less expensive labs.
However, reference pricing may not yet be ready to shine. The practice raises questions about care quality and access, administrative costs and communicating the plans to members. These kinds of loose ends need to be tied before reference pricing can succeed.
This FierceHealthPayer special report examines the benefits and limitations of reference-based pricing and takes a look at how these initiatives could evolve to gain more widespread adoption. Click through the numbered headings below to read exclusive interviews, examples of successful programs and get a glimpse into what the future holds for reference pricing.