Anthem Blue Cross Pilot Reduces Surgery Costs by 19%

Margaret Dick Tocknell, for HealthLeaders Media , August 9, 2013

In addition, surgical volumes at low-price hospitals increased by 21% for CalPERS members while higher-priced hospitals saw a 34% decrease in use by CalPERS members.

"Reference pricing completely changes the game," says Robinson. "A deductible doesn't affect your choice of hospitals because all hospital prices are above anyone's deductible. If you go to a high-price hospital or a low-price hospital, your deductible is the same."

The biggest surprise, he points out, was that some higher-priced hospitals (non value-based facilities) actually reduced their prices "in anticipation of consumer choice."

The average charge among the higher-priced hospitals fell 34% from $43,308 in 2010 to $28,465 in 2011.

Reference pricing is one tool employers may use to reduce healthcare costs. According to a Towers Watson study, 27% of employers are considering adding reference-based pricing by 2015 while 40% may add value-based benefit designs.

CalPERS is considering expanding this approach to some other procedures. In June WellPoint, Anthem's parent company, announced that it is teaming with CastLight, a technology company that specializes in healthcare transparency, to offer reference-based benefits throughout its affiliated health plans.

Margaret Dick Tocknell is a reporter/editor with HealthLeaders Media.
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