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Is Reference Pricing the Next Big Thing in Payment Reform?

Terry Shih, MD1; Justin B. Dimick, MD, MPH1
[+] Author Affiliations
1Center for Healthcare Outcomes and Policy, University of Michigan, Ann Arbor
JAMA Surg. 2014;149(12):1219-1220. doi:10.1001/jamasurg.2014.392.
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This Viewpoint discusses the implications of reference pricing, where patients are financially responsible for any excess difference in cost between the agreed-on price for a specific service and the provider’s actual price.

With increasing national interest to simultaneously lower costs and improve quality, payers are exploring innovative policy initiatives targeted at health care payment reform. The majority of these initiatives shift financial responsibility from the payer to the provider (ie, hospitals and clinicians): bundled payments and accountable care organizations both involve negotiating a lump-sum payment from the payer to be appropriated at the discretion of the provider. Health care systems are incentivized to provide efficient care, as they keep any money they do not use and must provide extra resource utilization at a loss.

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