Most otolaryngologists likely have heard about reference pricing, the relatively nascent concept that a payer—be it a person, a plan, or a pension fund—contributes a set amount toward specific procedures.
The most public example of the model is the California Public Employees’ Retirement System (CalPERS), which in 2011 began using the concept to determine what a hospital would be paid for a variety of elective procedures, including high-cost services such as knee and hip replacements, colonoscopies, cataract surgery, and arthroscopic surgery. Research has since shown that the model appeared to increase the use of ambulatory surgery centers, while employer and employee payments per procedure fell nearly 20%.
“In each of these very different areas [of procedures], there have been very significant savings for insurers,” said Timothy Brown, PhD, an associate adjunct professor of health economics in the School of Public Health at the University of California, Berkeley who has a research focus on reference pricing. “While we are still in the beginnings of the application of reference pricing to healthcare in California, it is a resounding success to date.”
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