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. 2015 Mar;34(3):415-22.
doi: 10.1377/hlthaff.2014.1198.

Reference-based benefit design changes consumers' choices and employers' payments for ambulatory surgery

James C Robinson  1 , Timothy Brown  2 , Christopher Whaley  3
Affiliations

Reference-based benefit design changes consumers' choices and employers' payments for ambulatory surgery

James C Robinson et al. Health Aff (Millwood). 2015 Mar.

Abstract

Some employers are using reference-based benefit (RBB) designs, also known as "reference-based pricing," to encourage patients to select lower-price ambulatory surgery centers instead of expensive hospital outpatient departments. This article analyzes the impact of such benefit designs for cataract removal surgery from the period 2009-13, using data on 2,347 surgical patients covered by the California Public Employees Retirement System (CalPERS), in comparison to 14,867 patients enrolled in non-CalPERS Anthem Blue Cross plans, which are not covered by RBB. After adjusting for changes in patient case-mix and other factors, the shift to RBB was associated with an increase in ambulatory surgery center use by 8.6 percentage points compared to trends among Anthem enrollees. Total employer and employee payments per procedure, after adjusting for changes in case-mix severity and market factors, declined by 19.7 percent compared with Anthem enrollees not subject to RBB. Consumer cost-sharing requirements increased for CalPERS patients who continued to use hospital outpatient departments but who were not exempted from RBB because of geographic or clinical factors. Reference-based benefits for cataract surgery saved CalPERS $1.3 million in the two years after implementation.

Keywords: Business Of Health; Consumer Issues; Health Spending; Managed Care—Consumers < Managed Care; Managed Competition.

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Figures

Exhibit 1
Exhibit 1
Prices From Hospital Outpatient Departments And Ambulatory Surgery Centers Prior To Implementation Of Reference-Based Benefits In California, 2011 SOURCES 2011 California Public Employees Retirement System (CalPERS) and Anthem Blue Cross medical claims data for California cataract surgeries. NOTES Each dot represents one facility. The horizontal line represents the reference-based benefits contribution limit imposed by CalPERS in January 2012.
Exhibit 2
Exhibit 2
Percentage Of Patients Selecting Ambulatory Surgery Centers Over Hospital Outpatient Departments Before And After Implementation Of Reference-Based Benefits In California, 2009–13 SOURCES 2009–13 California Public Employees Retirement System (CalPERS) and Anthem Blue Cross medical claims data for California cataract surgeries.
Exhibit 3
Exhibit 3
Total Payment Per Procedure Before And After Implementation Of Reference-Based Benefits In California, 2009–13 SOURCES 2009–13 California Public Employees Retirement System (CalPERS) and Anthem Blue Cross medical claims data for California cataract surgeries.
Exhibit 4
Exhibit 4
Financial Responsibility Before And After Implementation Of Reference-Based Benefits In California, 2009–13 SOURCES 2009–13 California Public Employees Retirement System (CalPERS) and Anthem Blue Cross medical claims data for California cataract surgeries.
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NOTES

    1. Cassidy A Health policy brief: site-neutral payments [serial on the Internet]. 2014. Jul 24 [cited 2015 Jan 14]. Available from: http://www.healthaffairs.org/healthpolicybriefs/brief.php?brief_id=121
    1. Fronstin P, Roebuck MC. Reference pricing for health care services: a new twist on the defined contribution concept in employment-based health benefits [Internet]. Washington (DC): Employee Benefit Research Institute; 2014. Apr [cited 2015 Jan 14]. Report No. 398. Available from: http://www.ebri.org/pdf/briefspdf/ebri_ib_398_apr14.refprcng.pdf
    1. Robinson JC. How to turn employees into value shoppers for health care. Harvard Business Review [serial on the Internet]. 2013. Oct 21 [cited 2015 Jan 29]. Available from: https://hbr.org/2013/10/how-to-turn-employees-into-value-shoppers-for-he...
    1. Robinson JC, MacPherson K. Payers test reference pricing and centers of excellence to steer patients to low-price and high-quality providers. Health Aff (Millwood). 2012;31(9): 2028–36. - PubMed
    1. Ruggeri K, Nolte E. Pharmaceutical pricing: the use of external reference pricing [Internet]. Santa Monica (CA): RAND Corporation; 2015. [cited 2015 Jan 14]. Available from: http://www.rand.org/pubs/research_reports/RR240.html - PMC - PubMed

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