--- title: "Reference-based pricing: an introduction" description: "Reference-based pricing: an introduction" image: https://blog.plexusgroupe.com/hubfs/Imported_Blog_Media/Untitled-design-63.jpg --- [Skip to content](https://blog.plexusgroupe.com/plexus-blog/news/from-lake-zurich-to-zeeland-reference-based-pricing-may-save-families-on-medical-costs#main-content) [![The Plexus Groupe](https://blog.plexusgroupe.com/hs-fs/hubfs/Logo%20and%20Design%20Files/plexus_sis_logo_color.png?width=1468&height=368&name=plexus_sis_logo_color.png "The Plexus Groupe")](https://www.plexusgroupe.com/) # Reference-based pricing: an introduction 11 August 2016 [Artoon](https://blog.plexusgroupe.com/author/artoon) [Employee Benefits](https://blog.plexusgroupe.com/tag/employee-benefits), [Human Resources](https://blog.plexusgroupe.com/tag/human-resources), [News](https://blog.plexusgroupe.com/tag/news), [Health Insurance](https://blog.plexusgroupe.com/tag/health-insurance) [![medical costs](https://blog.plexusgroupe.com/hubfs/Imported_Blog_Media/Untitled-design-63.jpg)](https://blog.plexusgroupe.com/hubfs/Imported_Blog_Media/Untitled-design-63.jpg) Reference-based pricing is an employee benefits trend taking hold as a strategy aimed to minimize cost increases and improve health outcomes for their employees. Here’s how reference-based pricing works: an employer, working in concert with an insurer, sets limits on how much it will reimburse a medical services provider such as a hospital or clinic for a certain medical procedure. The idea: the service provider can charge a rate that still ensures a profit for the service, but it’s not exorbitant. The rates can be tied to Medicare reimbursement, thus providing a commonly understood cost baseline.  The hospital or clinic has the benefit of having patients funneled its way, while the employer can realize some cost savings — and a little more cost certainty — regarding its medical spend. Thus, the advantage of referenced-based pricing for the employer should seem obvious. For employees, referenced-based pricing gives them a window into the cost of medical services. For elective surgeries, they will have a chance to shop around for the right fit within their budget. And because the company will only allow spending to a certain point, employees will be incentivized to stay within those cost perimeters. In a perfect world, reference-based pricing is a win-win for employers and employees.  Employers can reduce their health spend and exert some control over the vexing cost of medical services. Employees, meanwhile, participate in a system that gives them some choice and can help improve the firm’s bottom line. And with rising medical costs no small concern in corporate America, that’s a proposition that’s easy to get behind. For more information on reference-based pricing, contact an employee benefits client service team member at 847-307-6100 (Deer Park, Ill.), 312-606-4800 (Chicago), 972-770-5010 (Dallas) or 405-840-3033 (Oklahoma City), or [contact us](http://www.plexusgroupe.com/s/contact-us/img) via the Web. 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[![](https://blog.plexusgroupe.com/hs-fs/hubfs/Imported_Blog_Media/Plexus_CTA_final.png?width=352&name=Plexus_CTA_final.png)](https://blog.plexusgroupe.com/plexus-blog/news/pet-insurance-employee-benefit-introduction) ##### [Pet insurance as an employee benefit: an introduction](https://blog.plexusgroupe.com/plexus-blog/news/pet-insurance-employee-benefit-introduction) Pet insurance continues to grow in popularity among employers. It’s this simple: people adore their... [![The Plexus Groupe](https://blog.plexusgroupe.com/hs-fs/hubfs/Logo%20and%20Design%20Files/plexus_sis_logo_color.png?width=1468&height=368&name=plexus_sis_logo_color.png "The Plexus Groupe")](https://www.plexusgroupe.com/) HQ: 21805 W. Field Parkway Suite 300 Deer Park, IL 60010 847.307.6100 [communications@plexusgroupe.com](mailto:communications@plexusgroupe.com) Copyright © 2022 The Plexus Groupe. All Rights Reserved. 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