In 2011, The California Public Employees' Retirement System (CalPERS) implemented reference pricing for cataract surgery.
Cataract surgery is an operation to restore vision after the lens inside the eye becomes clouded. The procedure often involves replacing the clouded lens with an artificial lens, allowing the patient to gain clear vision again. The surgery can generally be performed using ultrasound energy and laser-assisted technology.
Following the successful implementation of reference pricing for joint replacement surgery CalPERS expanded the pilot program to include cataract surgery, addressing the wide variation in prices charged by hospital outpatient departments and ambulatory surgery centers.
Based on the prices charged by ambulatory centers for the same procedure, CalPERS established the reference price at $2,000 for hospital outpatient departments.
Consumers who selected an ambulatory center were not subjected to reference pricing. Consumers who selected a hospital outpatient department were responsible for any difference between the hospital charge and reference price.
Implications
Following the implementation of reference pricing, the use of ambulatory centers (ASCs) increased by 21.1%.
The average price paid by CalPERS for cataract surgery declined by 10.2%.
After adjusting for other factors, in 2013 CalPERS paid $1,019 per cataract procedure, 45% less than it would have paid without reference pricing.
Cost-sharing payments were much lower for CalPERS patients who selected ambulatory surgery centers for cataract removal over hospital outpatient departments.
FULL ARTICLE:Reference-Based Benefit Design Changes Consumers’ Choices And Employers’ Payments For Ambulatory Surgery
Cataract Surgery Prices From Hospital Outpatient Departments And Ambulatory Surgery Centers (ASC) Prior To Implementation Of Reference-Based Benefits In California, 2011