Most of you have heard me speak about reference-based pricing by now.  It’s no secret to anyone who follows me on professional social media platforms that I am a fan. While the spotlight on this subject is getting warmer by the day, the controversial opinions of followers often feel a little cold. It’s not the challenge toward this pricing methodology that prompted me to write this, but instead the misconception that it doesn’t work or can’t work. It does, and it can, in the hands of a consultant who knows how to align the components to maximize its success.

So this article is for everyone; the nay-sayers and the heck-yayers. Let’s break down the why and the how and dispel some of the most common myths along the way.

Defense of reference-based pricing comes in all forms; in arguments of excess balance billing, and even legislative bills questioning the future of this method. This type of plan design is still heavily considered “innovative” and thus, most advisors just don’t know how to manage the model. And frankly, many are too stuck in their comfort zone to try to figure it out. But if you’re a consultant who works for your client, it is your responsibility to learn and adapt as the market and environment changes. And, if you hesitate to at least take on the knowledge of these out-of-the-box solutions, you may be doing an immense disservice to your clients. We’re forming the health care revolution here; come aboard!

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