Each day more people are becoming aware of the relevance and advantages of health insurance. The necessity for having health insurance to cover the medical expenses at the time of medical urgency is paramount. Reference-based pricing is an effective way to settle healthcare claims. It is an effective cost-containment strategy that replaces the traditional method of pricing to pay doctors, labs, clinics, and hospitals a percentage of the latest established healthcare policy benchmark. The system provides more clarity and transparency in claim settlement. The innovation of reference-based pricing has simplified the task of ascertaining the actual cost of a healthcare claim. It provides the employer of a company with a clear understanding of the actual healthcare claims of his staff. Through this innovative and scientific price calculation mechanism, a business organization can save a lot of money on employee healthcare.

However, even today most employers are unknown about the reference-based pricing to settle healthcare costs. Recent research shows that only 2% of all employers are aware of this system and use it. Reference-based pricing also allows the private insurance companies to use the DRG medicare pricing system effectively to pay the hospitals and healthcare facilities after the hospitalization of the patients. Health care costs are the biggest cost burden of a business organization. The healthcare cost is continuously rising and most organizations are carrying this burden with almost no price transparency at all. Reference-based pricing provides the employer with the opportunity to keep the healthcare cost and expenses under control. Smart employers are cutting health plan costs with reference-based pricing.

Benefits:
Reference-based pricing is beneficial for employers as well as employees. The cost of reference-based pricing is much lower than the cost of the traditional pricing mechanisms. In true nature, reference-based pricing is recalibrating the buying benefits for purchasing a healthcare scheme. Though it lowers the cost of hospitals, it is beneficial for the hospitals as they can also get their payments promptly from the insurance companies under the DRG Medicare pricing mechanism. Through the implementation of a reference-based pricing system, patients can know the cost of the treatment in advance that allows them to plan their healthcare in a better way. Moreover, leaving organizations have also come up with SaaS-based healthcare repricing systems that help the organizations in determining and evaluating the healthcare cost in advance. It provides the organizations with a competitive edge over others and makes their financial system more efficient.