The God Father of Reference Based Pricing is…………………………

By Molly Mulebriar

There appears to be some confusion these days as to rightful owner of the title God Father of Reference Based Pricing.  

In our view, ownership should go to the first to have implemented the strategy in practical terms rather than just claiming to have “thought of the scheme before anyone else.”

So our team researched to determine who, in our opinion, is indeed the real God Father of Reference Based Pricing and offer the following conclusion.

J. Patrick Rooney

Back in the early days when everyone was buying PPO plans J. Patrick Rooney (1927-2008) acknowledged based on authoritative research that Medicare +25% was a reasonable amount for hospitals to charge. He found it was a common practice back then for hospitals to charge 3.5 times what Medicare paid for services which, in his view, was unfair. Rooney felt people needed tools to defend themselves against these high costs and were entitled to pay a reasonable fee instead.

Certainly one would suppose Rooney should be anointed the title of Godfather. However, our staff could not find any evidence he actually implemented the scheme as a health insurance risk management strategy. Instead Rooney memorialized his view in an article entitled “Defending the Uninsured” and was influential in helping the Fairness Foundation focus on the uninsured  and disputes over hospital bills.

The Real Godfather

Further research uncovered who we are confident is the real Godfather of Reference Based Pricing. He not only seized upon the concept in theory, he actually implemented it for employer sponsored health plans beginning back in the early 1990’s. He is still active in Reference Based Pricing to this day.

The winner is……………………..(drum roll please)………………..

J. P. Farley – Godfather of Reference Based Pricing