Many Texas employers have been using reference based pricing strategies since 2007. These early adopters have enjoyed great success in containing medical costs. All have succeeded in beating medical trend, maintaining static costs while improving benefits.
Markets sometimes take time to adapt, as the status quo is always in the best interests of vested interests, including insurance brokers, carriers, TPA’s, hospitals and managed care organizations. Now we are seeing reference based pricing strategies gaining rapid market growth. For example the state of Montana adopted a reference based pricing for the state’s employees just this month. – Bill Rusteberg
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