Reference pricing: The case of screening colonoscopies
Timothy T. Brown and
Christopher M. Whaley
Journal of Health Economics, 2019, vol. 65, issue C, 246-259
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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Persistent link: https://EconPapers.repec.org/RePEc:eee:jhecon:v:65:y:2019:i:c:p:246-259
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