This article was excerpted from a Leadership digital exclusive. For much more, see hfma.org/Leadership/PriceTransparency.
Showing patients how costs vary by provider and facility may not be enough to improve value across the board. But coupling new benefit and network design with enhanced price transparency tools has the potential to change consumer behavior.
James C. Robinson, PhD, MPH, professor of health economics at the University of California, Berkeley, believes reference-based benefit design, also known as reference pricing, can promote greater cost consciousness among healthcare consumers. Reference prices set a maximum allowable cost per service, with the patient assuming responsibility for the difference between what the plan will pay and what the provider charges.
The issue with traditional, deductible-centered coverage is that most consumers are not paying the “last dollar,” Robinson says. “Reference pricing creates an incentive for people to care.”
Reference-based benefit designs provide good coverage if patients choose lower-cost providers, Robinson says, making them preferable to high-deductible plans.