How are Reference Based Pricing Companies Beneficial For Your Business?

There is no secret that health insurance premiums are rising steadily for many years. This means an ongoing search for employers for finding ways to save money while consistently providing quality benefits for their employees.

One of the innovative concepts for self-funded employers that are rapidly gaining popularity is Reference Based Pricing, or “RBP.” The Reference Based Pricing companies have the potential of saving significant amounts of money for both employers and employees.

Let’s take a look at how to reference based pricing companies are beneficial:

Transparency

The thing that gives reference based pricing an edge over traditional funding arrangements is its cost transparency. Employers who opt for RBP have more control over the rising healthcare costs and can deal with the increasing costs without interfering with their bottom line. However, it is vital to inform your employees that not every healthcare system accepts the capped insurances as reference-based pricing does. To ensure that your employees correctly understand how this balance billing works, it is always a good idea to hire an experienced vendor who has strong patient advocacy.

Ability to Understand

One of the most significant benefits of RBP is the ability to understand how much a specific procedure or treatment will cost. Agreements with in-network healthcare providers ensure that as long as an employee visits the provider who is in-network, then the total cost will be covered at the established price. However, an employee can still prefer seeing a provider outside-of-network where they might have to pay a portion of the bill from their pocket. Reference-based pricing enables employers to save money on health care expenditures and fixed stop-loss premium. These savings can be further passed onto the employees.

Beneficial for Employer As Well

RBP benefits not only the employees but also the employers. Having Reference Based Pricing companies by their side, an employer doesn’t need to risk paying exorbitant costs for medical services that can be completed more inexpensively. Setting a cap on certain types of procedures enables employers to encourage the employees to take charge of their own health care. Employees are then forced to consider both cost as well as quality while choosing where they need to get their procedure done, which often requires research and individual participation for their own health care. The healthcare industry is one where most of the people do not know the cost of a particular service until their bill arrives weeks later. Thus, Reference Based Pricing creates higher employee engagement in health care decisions.