from Journal of Health Economics at http://bit.ly/2CMHZQ1 on March 31, 2019 at 12:06PM
Publication date: Available online 29 March 2019
Source: Journal of Health Economics
Author(s): Marion Aouad, Timothy T. Brown, Christopher M. Whaley
Abstract
We study the introduction of reference pricing to the California Public Employees’ Retirement System. Reference pricing changes the relative price of using a hospital versus an ambulatory surgery center (ASC) for patients receiving a colonoscopy, leading to as good as random variation in patients’ use of ASCs. We find a 10 percentage point increase in the share of patients using an ASC, leading to a $2300 to $1700 reduction in prices paid for patients who switch to ASCs. Our results suggest that the use of ASCs has a causal effect on prices paid and has no negative effect on patient health outcomes.
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