CalPERS shows how to lower hospital costs... should be adopted by every employer/ins co.

[True Earthling]

Here is how the program worked. California public employees were told they could use any hospital, and any orthopedic surgeon, they wanted to, but with the understanding that their insurance would cover only $30,000 of hospital expenses for their hip or knee replacement procedures. So if a patient chose a hospital that charged $40,000 for such a procedure, that patient would be financially responsible for that extra $10,000. The results of this program were dramatic.

People still had freedom of choice, but this freedom came at a price.

This reference pricing program not only influenced where people received their procedures, but how much they paid for them. In response to this lost business, high-priced hospitals dramatically reduced their fees:

Remarkably (sarcasm alert) their new fees came in just under $30,000.

http://www.forbes.com/sites/peterubel/2013/09/20/warning-to-orthopedic-hospitals-your-fees-are-no-match-for-reference-pricing/?utm_source=followingimmediate&utm_medium=email&utm_campaign=20130920