Reference Pricing Saves CalPERS More Than $5 Million; CHLA Gets $1.5 Million From Walgreens
Reference Pricing Initiative Saves CalPERS More Than $5 Million
A reference pricing initiative created by the California Public Employees Retirement System has saved the organization $5.5 million by cutting costs for elective hip and knee replacements.
The initiative, which was created in conjunction with Anthem Blue Cross of California, set price caps based on an analysis of cost data for providers. Payments for replacement procedures were limited to $30,000. Patients who went to facilities who charged more for this amount were liable for any amounts above the reference price.
According to the publication Health Data Management, the proportion of patients choosing so-called “high-value” hospitals – those that kept their costs within the reference price – rose from 50% before the program was implemented in 2011 to 64% about a year after it was introduced. Among the more expensive hospitals that charged above the reference price, they cut prices an average of $42,000, to $27,148 by 2012. A total of 15 hospitals were added to CalPERs' high-value category as a result.
Altogether, the cost to CalPERs for hip and knee replacement surgeries dropped by 26% during the life of the initiative, or more than $9,000 per procedure, with 88% of the reduction linked to hospitals cutting their prices.
CalPERS has since adopted value pricing for outpatient elective cataract surgeries, colonoscopies, and arthroscopies.
The Obama Admininstration recently announced that it was adopting reference pricing guidelines for payers to use in order to help control healthcare prices.
Walgreens Grants Children’s Hospital of Los Angeles $1.5 Million
Pharmacy retailing giant Walgreens has donated $1.5 million to Children's Hospital of Los Angeles.
The unrestricted gift will be used for general medical services, officials announced.
“This gift will mean so much to the patients and families relying on CHLA. It will allow us to provide world-class pediatric care, conduct ground-breaking medical research, provide community outreach to underserved youth and train the next generation of pediatricians and nurses,” said Richard D. Cordova, CHLA's chief executive officer.
In addition to the unrestricted gift, Walgreens will be soliciting additional donations for CHLA at its checkstands during the month of June. It will also work with the company Y Water to donate a sum of money to CHLA tied to the purchases of Yo Gabba Gabba juices and Y Water beverages.
“Walgreens is committed to helping the communities we serve, and in partnership with our stores, employees and customers, we can all work together to make sure every child has access to high quality, affordable care so they have the opportunity to get, stay and live well,” said Scott Corley, Walgreens' vice president of operations and community development.
