OnDemand WTP Pricing Research

Reverse Reference Pricing: Rewarding Patients For Reducing Medicare Costs | Health Affairs

Prices for health care services vary significantly, not only across markets but also within markets across settings of care. For example, the same services or care received in hospital outpatient departments (HOPDs) can cost several times as much as care received in ambulatory surgery centers (ASCs), with no difference in quality. This significant variation in prices has led private insurance markets to try a number of innovations to encourage consumers to price shop for health care services, including high-deductible health plans and price transparency programs. However, despite the thousands of dollars that could be saved by going to low-priced providers, most consumers do not price shop.

Private Insurers Have Used Innovative Approaches To Encourage Price Shopping
There is one solution that has shown impressive results in encouraging price shopping and promoting price competition among providers—reference pricing. Under reference pricing, the insurer sets a reference price, and the patient pays standard cost sharing if he or she goes to a provider with a price below the reference price. However, the patient pays the difference between the provider price and the reference price as additional out-of-pocket costs if he or she goes to a provider with a price above the reference price. Reference pricing forces consumers to make a financial tradeoff between going to more expensive providers and saving money.

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Reverse Reference Pricing: Rewarding Patients For Reducing Medicare Costs | Health Affairs.

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