A reference pricing policy for elective surgeries, implemented by Anthem and the California Public Employees' Retirement System (CalPERS) returned $5.5 million in aggregate savings and a 26 percent reduction in price paid for the first two years of the policy's existence.

The model, used by CalPERS' self-funded preferred provider organizations and highlighted by the Agency for Healthcare Research and Quality's Innovation Exchange, was originally put in place for elective knee and hip replacements and has since been expanded to outpatient elective cataract surgeries, colonoscopies, and arthroscopy procedures. For each procedure, CalPERS sets a maximum allowable charge (the reference price) at a level that ensures enrollee access to an array of high-quality, low-price providers.

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