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Reference pricing: The case of screening colonoscopies

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  • Aouad, Marion
  • Brown, Timothy T.
  • Whaley, Christopher M.

Abstract

We study the introduction of reference pricing to the California Public Employees’ Retirement System. Reference pricing changes the relative price of using a hospital versus an ambulatory surgery center (ASC) for patients receiving a colonoscopy, leading to as good as random variation in patients’ use of ASCs. We find a 10 percentage point increase in the share of patients using an ASC, leading to a $2300 to $1700 reduction in prices paid for patients who switch to ASCs. Our results suggest that the use of ASCs has a causal effect on prices paid and has no negative effect on patient health outcomes.

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  • Aouad, Marion & Brown, Timothy T. & Whaley, Christopher M., 2019. "Reference pricing: The case of screening colonoscopies," Journal of Health Economics, Elsevier, vol. 65(C), pages 246-259.
    • Handle: RePEc:eee:jhecon:v:65:y:2019:i:c:p:246-259
    DOI: 10.1016/j.jhealeco.2019.03.002
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    1. Cremer, Helmuth & Lozachmeur, Jean-Marie, 2022. "Coinsurance vs. co-payments: Reimbursement rules for a monopolistic medical product with competitive health insurers," Journal of Health Economics, Elsevier, vol. 84(C).
    2. Richards, Michael R. & Seward, Jonathan A. & Whaley, Christopher M., 2022. "Treatment consolidation after vertical integration: Evidence from outpatient procedure markets," Journal of Health Economics, Elsevier, vol. 81(C).
    3. Yaa Akosa Antwi & Marion Aouad & Nathan Blascak, 2023. "I've Got 99 Problems But a Bill Ain't One: Hospital Billing Caps and Financial Distress in California," Working Papers 23-20, Federal Reserve Bank of Philadelphia.
    4. Geruso, Michael & Richards, Michael R., 2022. "Trading spaces: Medicare's regulatory spillovers on treatment setting for non-Medicare patients," Journal of Health Economics, Elsevier, vol. 84(C).
    5. Sebastian Linde & Ralph Siebert, 2021. "Exploring the Heterogeneous Effects of State Price Transparency Laws on Charge Prices, Negotiated Prices, and Operating Costs," CESifo Working Paper Series 9348, CESifo.
    6. Marion Aouad & Timothy T. Brown & Christopher M. Whaley, 2021. "Understanding the distributional impacts of health insurance reform: Evidence from a consumer cost‐sharing program," Health Economics, John Wiley & Sons, Ltd., vol. 30(11), pages 2780-2793, November.

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