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(AP Photo/Sue Ogrocki, File)

The California Public Employees Retirement System saved $5.5 million dollars on hip and knee replacement surgeries between 2010 and 2012, about 30 percent of their costs – and some health care experts believe reference pricing, the strategy used to achieve that end, is a potential solution to the out-of-control health care spending in the United States.

As defined by the World Health Organization, reference pricing “is not a form of price regulation; it is a means of limiting expenditure” by looking at market equivalent pricing “and setting a reimbursement tariff (called reference price).”



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