Reference Pricing

Reference Pricing: The Home Depot, Inc.

Learn about the reference pricing benefit design The Home Depot, Inc. implemented to address price variation and the valuable lessons the company learned from its population’s response.

Do you ever wonder why do some hospitals charge 500% of Medicare rates while others only charge 150%? Research shows that the price of health care services and procedures can vary significantly in a given market and have no correlation to quality. Employers can look to reference pricing as a possible strategy to mitigate the variation in costs across providers in a given health care market. Unnecessary price variation bloats health care spending for employers, and many progressive purchasers are taking actions to combat this wasteful spending.

Catalyst for Payment Reform interviewed members of The Home Depot benefits team about the reference pricing program they implemented as a means to reduce unnecessary health care spending and provide higher-value health care for their associates. Download the case study to understand the entire process, from ideation to implementation, even results, to understand how and why The Home Depot, Inc experimented with the reference pricing model.

Reference pricing is a strategy employers can use to address price variation in a given market. Written exclusively to help purchasers learn from one another and spread best practices, this case study includes the following topics:

  • The problem & background
  • Designing a strategy to align with company values
  • Rolling out the model, including a look at employee communications
  • Results and lessons learned
  • What’s next for The Home Depot, Inc. benefits team?

By combining CPR’s expertise in payment reform and benefit design models with an inside-look at a real employer experience, this case study represents an in-depth tool for other purchasers and employers. Through peer-to-peer sharing, CPR works to arm purchasers with the resources they need to improve the functioning of the health care marketplace and the value of each health care dollar.


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