Reference Based Pricing for Employee Healthcare Needs

Agencies that provide supports and services to individuals who have intellectual and/or developmental disabilities operate within a system in which governmental agencies typically control the price to be paid for the provision of these supports and services. One consequence of the imposition of these fixed prices is a chronic shortage of those staff who provide direct supports and services to people who have disabilities. Because agencies have no control over the prices they can charge for the provision of supports and services, they are unable to raise staff wages sufficiently to create an equilibrium between supply of and demand for staff. Instead, equilibrium must be sought by cost reduction measures. Strategies to reduce costs are essential to the continuation of this service model as substantial increases in governmental funding are unlikely. Reference based pricing for employee health insurance is described and proposed as a cost reduction strategy within the intellectual and developmental disability community. An example of the adoption of this strategy within the intellectual disability field is provided.

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