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Reference pricing: The case of screening colonoscopies

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

Journal of Health Economics, 2019, vol. 65, issue C, 246-259

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.

Date: 2019
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DOI: 10.1016/j.jhealeco.2019.03.002

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Handle: RePEc:eee:jhecon:v:65:y:2019:i:c:p:246-259