Findings from HCFO-Funded Work on Reference Pricing Featured in AJMC

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Under reference pricing, insurers set a reimbursement limit for medications and services, and patients pay out-of-pocket anything above that limit. In the United States, some health plans are using reference pricing for surgical and diagnostic procedures. In a piece for the American Journal of Managed Care, Surabhi Dangi-Garimella discusses a HCFO-funded study from James Robinson, Ph.D., University of California, Berkeley, which documented changes in laboratory pricing and the selection of a testing laboratory by employees of the grocery store network Safeway following the implementation of a reference pricing policy. The researchers found that patients who have access to both the prices charged by a testing laboratory as well as reference pricing choose lower-cost laboratories, resulting in overall cost savings. Robinson notes, “Reference pricing can’t be used across all types of healthcare. While being treated for cancer, we don’t expect the patient to shop the market.” Findings from Robinson’s study were also featured in Reuters, Fox News, Advisory Board, Medscape, and Brookings, and Paul Ginsburg, Ph.D., University of Southern California, wrote an accompanying editorial in JAMA Internal Medicine.