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Reference based pricing is a simple, easy to pass (it can be framed as price caps) rule that would cut healthcare spending by 25%. However, part of the reason w

Reference based pricing is a simple, easy to pass (it can be framed as price caps) rule that would cut healthcare spending by 25%. However, part of the reason we spend so much is that we demand so much. We have urgent cares on every block. Someone has to pay for those facilities and staff to be there all the time.

PoignardAzur 5y ago
I just googled reference-based pricing, so forgive me if I'm missing something, but isn't that basically state price controls? The way I understand it, it can work if the state uses the right metrics to determine prices, but there's a ton of failure modes where prices are set too high or too low. (Then again, it's more or less how we do healthcare in France, so I dunno)
- galvin 5y ago
  Medical practitioners and private institutions are not required to follow the state set prices in France. It's the limit of how much the social security will cover so essentially anyone who sets prices above those limits is competing with "free". Technically social security covers 70% of the state set price and insurance must at a minimum cover the other 30% but that's the general idea.
- snarf21 5y ago
  It wouldn't be state based. The federal government would pass a law that you can't charge more than Medicare +20%. This fixes some major rent-seeking costs in the current system. It gets rid of the need for brokers (which typically charge 5%) because there is no need to negotiate prices. It also gets rid of everything out of network, you know what the max is. You can't have anesthesiologist that are your only option in the hospital but they are not in network even though the hospital is. It would also push a lot of places to take a standard discount for cash at time of service, just pay Medicare rates. They take less but get it now. It does mean that health "insurance" companies would need to start differentiating on price, wellness plans and customer service instead of exploitative pricing deals.

PoignardAzur 5y ago

I just googled reference-based pricing, so forgive me if I'm missing something, but isn't that basically state price controls? The way I understand it, it can work if the state uses the right metrics to determine prices, but there's a ton of failure modes where prices are set too high or too low. (Then again, it's more or less how we do healthcare in France, so I dunno)

galvin 5y ago
Medical practitioners and private institutions are not required to follow the state set prices in France. It's the limit of how much the social security will cover so essentially anyone who sets prices above those limits is competing with "free". Technically social security covers 70% of the state set price and insurance must at a minimum cover the other 30% but that's the general idea.
snarf21 5y ago
It wouldn't be state based. The federal government would pass a law that you can't charge more than Medicare +20%. This fixes some major rent-seeking costs in the current system. It gets rid of the need for brokers (which typically charge 5%) because there is no need to negotiate prices. It also gets rid of everything out of network, you know what the max is. You can't have anesthesiologist that are your only option in the hospital but they are not in network even though the hospital is. It would also push a lot of places to take a standard discount for cash at time of service, just pay Medicare rates. They take less but get it now. It does mean that health "insurance" companies would need to start differentiating on price, wellness plans and customer service instead of exploitative pricing deals.