As group health insurance costs continue to rise, employers, their plan members and their benefits consultants are hungry for ways to control costs and maintain benefit offerings.
Many consider one of the primary cost drivers of the rising cost of health insurance to be the cost of facility-based care. Employer-sponsored health plans pay on average two or three times what Medicare pays for the same service when accessed through traditional insurance networks, and the rate of inflation for facility-based healthcare has far outpaced any other good or service for 15+ years.
Reference-based pricing has been effectively utilized for decades as a benefits strategy to mitigate the rising cost of facility-based care. Given cost pressures on healthcare costs, the interest and adoption of referenced-based pricing among the employer community is growing, and with that growth have come innovations to improve the RBP model.