The economics of modern healthcare have become a labyrinth for employers to negotiate, usually annually, where costs typically spiral out of control year over year. In the face of these perpetually and rapidly rising costs, at Stotz Equipment, we have been seeking a better path – both for us and for our employees – for some time now. A few years ago, we hit on an innovative strategy that is proving extremely effective and successful: reference-based pricing (RBP). RBP has garnered attention in recent years for its potential to rein in healthcare expenses while ensuring quality care, so we decided to give it a try.

In short, through RBP, which we began offering as an option for our employees just three years ago, we have seen significant savings. Specifically, this year, in year three, I would estimate that at Stotz, we saved about 65% on health care costs with this plan. At the same time, we have been able to provide high quality health care to our employees, without compromise. It’s made a staggering difference.