Reference Based Pricing – A Cash Cow for Hospitals?

Reference Based Pricing plans are increasingly becoming targets of hospitals seeking “found money” in desperate attempts at solvency instead of efficiency. RBP plan sponsors can expect a slew of demand letters for claims going back three to five years of “uncompensated care” to the tune of millions of dollars.

Hospital lawyers will be Dialing for Dollars, hoping weak plan sponsors will open their check books even though they have no obligation to do so.

“Under earning” managed care contracts will be targeted too with hospitals seeking higher prices and better contract terms. Hospitals will demand turbocharged escalator clauses and the end of the uncertainty of long-term pricing.

This all adds up to bad news for powerless consumers.

The following article describes how hospitals are suffering financially these days. While the article reports the easy solution which is to charge more for health care, there is no mention of an obvious alternative solution which is to become more efficient.

“Billions in losses and negative operating margins expected to be commonplace through year-end have hospitals warning of service closures and potentially systemic collapse without immediate outside support.”

Hospitals’ ‘unsustainable’ 2022 losses forcing service closures (