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Would reference pricing hold down health costs?

Some health care experts believe reference pricing, the strategy used to help the California Public Employees Retirement System save about 30 percent of their costs, is a potential solution to the out-of-control health care spending in the U.S.

By Amber Taufen | Updated on July 11, 2014
(AP Photo/Sue Ogrocki, File)

The California Public Employees Retirement System saved $5.5 million dollars on hip and knee replacement surgeries between 2010 and 2012, about 30 percent of their costs – and some health care experts believe reference pricing, the strategy used to achieve that end, is a potential solution to the out-of-control health care spending in the United States.

As defined by the World Health Organization, reference pricing “is not a form of price regulation; it is a means of limiting expenditure” by looking at market equivalent pricing “and setting a reimbursement tariff (called reference price).”

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