Abstract：
:This paper examines the effects of the reference pricing program implemented by the California Public Employees Retirement System (CalPERS) in 2012. The program uses targeted cost-sharing to incentivize patient price shopping. We find that the program leads to a 10.3% increase in the use of low-price providers and reduces the average cost per procedure by 12.5%. We further estimate that the program reduces medical spending by $218.8 per procedure, which we estimate is approximately 53.7% of the excessive spending that is due to patient choice of higher price providers caused by insurance coverage, at the expense of a $94.3 (or 12.5%) reduction in consumer surplus. The cost savings from the reference pricing program is about two to three times as large as the reduction from implementing a high-deductible health plan, while the accompanying consumer surplus reduction is much smaller under reference pricing.
journal_name
J Health Econjournal_title
Journal of health economicsauthors
Whaley CM,Guo C,Brown TTdoi
10.1016/j.jhealeco.2017.09.012subject
Has Abstractpub_date
2017-12-01 00:00:00pages
201-221eissn
0167-6296issn
1879-1646pii
S0167-6296(16)30293-4journal_volume
56pub_type
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