Reference Based Pricing recognizes medical provider's actual cost to deliver the service and ensures a fair margin above provider's published cost.
Consultants and Brokers are limited in their ability to deliver true healthcare cost reduction services. The biggest bang for the buck is derived from cost shifting to the employer. This can only be taken so far and the ACA limits the financial impact to the employee.
The logic of a wellness plan cannot be argued; however, the cost reductions will not be realized for several years.
There are several other important cost reduction tactics however, nothing possesses more cost reduction than reference based pricing. Typical first year savings for most self-funded plans is over 30%.
Very few Reference Based Pricing vendors are "trouble free." An employer can have serious benefit plan payment problems (including Liability) if this process is not delivered with "all bases covered."
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