Introduction
The current health care reimbursement system in the United State is not cost effective, and politicians, along with insurance companies, are searching for a new reimbursement model. A new health care arrangement, value based health care, seems to be gaining momentum with help from the biggest piece of health care legislation within the last decade; the Affordable Care Act is pushing the health care system to adopt this arrangement. However, the community of health care providers is attempting to slow the momentum of the value based health care, because they wish to maintain their autonomy under the current fee-for-service reimbursement system (FFS).
FFS is an arrangement under which a health care provide renders treatment or tests to a patient in return for payment. This system encourages physicians and other providers to provide unnecessary services by rewarding volume and intensity of service; the outcome of the FFS system is to increase profits for providers. Because of this volume based arrangement, the FFS model is widely seen as an
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The patients should receive safe and appropriate care in return for payment equal to the level of care received (“What is Value-Based Care”, 2016). For providers, this means using affordable and proven treatments while also catering to the patient’s needs (“What is Value-Based Care”, 2016). Additionally, this model is built upon measurement which when relayed to the patient will inform them of the scope and cost of their care. Examples of measures that are tracked, provided by the article “What is Value-Based Care,” include: procedural complications, hospital-acquired infections, and readmissions; providers face penalties if these metrics are unacceptable (“What is Value-Based Care”,
It is generally accepted that the method of payment to physicians affect their professional attitude and behaviour. Consequently, health policy makers manipulate payment system in an attempt to achieve optimal health care for their citizens such as improve accessibility, quality of care, patient’s satisfaction and cost containment. In Ontario, there are a wide range of mechanisms that are used to pay physicians for their services that are funded by both federal and provincial government. According to Canada Health Act annual report (2013), the majority of primary healthcare physicians are funded using the fee for service payment arrangement but of that majority, only less than 30% are compensated exclusively according the fee for service plan. The remaining physicians are funded using one of the following mixed compensation models:
In Medicare's traditional fee-for-service payment system, doctors and hospitals generally are paid for each test and procedure. This drives up costs by rewarding providers for doing more, even when it’s not needed. ACOs continue to utilize fee for service by creating incentives to be more efficient by offering bonuses when providers keep ...
Pay-for-performance (P4P) is the compensation representation that compensates healthcare contributors for accomplishing pre-authorized objectives for the delivery of quality health care assistance by economic incentives. P4P is increasingly put into practice in the healthcare structure to support quality enhancements in healthcare systems. Thus, pay-for-performance can be seen as a means of attaching financial incentives to the main objectives of clinical care. However, reimbursement is a managed care payment by a third party to a beneficiary, hospital or other health care providers for services rendered to an insured or beneficiary. This paper discusses how reimbursement can be affected by the pay-for-performance approach and how system cost reductions impact the quality and efficiency of healthcare. In addition, it also addresses how pay-for-performance affects different healthcare providers and their customers. Finally, there will also be a discussion on the effects pay-for-performance will have on the future of healthcare.
In December 2011, Texas Health and Human Services Commission (HHSC) received federal approval of a Medicaid Section 1115(a) Demonstration Waiver, entitled “Texas Healthcare Transformation and Quality Improvement Program,” for the period starting with December 12, 2011 through September 20, 2016. The main objective of the 1115 Waiver is to improve access to and quality of health care by expanding Medicaid managed care programs and promoting health care delivery system reforms while containing cost growth. Specifically, the Waiver created two new pools of funding—Uncompensated Care (UC) and Delivery System Redesign and Innovation Payment (DSRIP) pools—by redirecting funds that were available under the old Upper Payment Limit (UPL) payment methodology. DSRIP funding is used to offer financial incentives to health care providers that develop and implement projects aimed at improving how care is delivered to low-income populations. Specifically, the providers (often referred to as the “performing providers” or “performers”) propose and execute projects like programs, strategies, and investments designed to enhance access to health care, quality of health care, cost-effectiveness of services, and health of the patients and families served.
Miller, H. D. (2009). From volume to value: better ways to pay for health care. Health Affairs
Providers must act in the best interest of the patient and their basic obligation is to do no harm and work for the public’s wellbeing. A physician shall always keep in mind the obligation of preserving human life. Providers must communicate full, accurate and unbiased information so patients can make informed decisions about their health care. As a result of their recommendations, providers are responsible for generating costs in health care but do not generate the need for those expenses. Every hospital has both an ethical as well as a legal responsibility to provide care, even if the care may be uncompensated.
In her paper emerging model of quality, June Larrabee discusses quality as a construct that includes beneficence, value, prudence and justice (Larrabee, 1996). She speaks of quality and value as integral issues that are intertwined with mutually beneficial outcomes. Her model investigates how the well-being of individuals are affected by perceptions of how services are delivered, along with the distribution of resources based on the decisions that are made (Larrabee, 1996). She speaks of the industrial model of quality and how the cornerstone ideas of that model (that the customer always knows what is best for themselves) does not fit the healthcare model (Larrabee, 1996). Larrabee introduces the concept that the patient va provider goal incongruence affects the provide (in this case the nurse) from being able to positively affect healthcare outcomes (Larrabee, 1996). The recent introduction of healthcare measures such as HCAHPS: Patients' Perspectives of Care Survey has encouraged the healthcare community to firmly espouse an industrial model of quality. HCAHPS is a survey where patients are asked questions related to their recent hospitalization that identifies satisfaction with case based solely on the individuals’ perception of the care given. This can lead to divergent goals among the healthcare team or which the patient is a member. Larrabee’s model of quality of care model
Managed care reimbursement models have contributed to risk avoidance by negotiating discounts, discouraging use, and denying payments for charges that appear to be false. Health care reform has increased awareness to the quality of care providers give, thus shifting the responsibility onto the provider to provide quality care or else be forced to receive reduced reimbursements (Buff & Terrell,
In sum, America needs to reevaluate the status quo surrounding medical care. It is becoming increasingly apparent that the current model only benefits a select few and causes insufferable costs for the rest of the world. If there is no reform for these issues, money will continue to be siphoned directly into the pockets of large, for-profit companies that benefit from the strife of
...lthcare system is slowly shifting from volume to value based care for quality purposes. By allowing physicians to receive payments on value over volume, patients receive quality of care and overall healthcare costs are lowered. The patients’ healthcare experience will be measured in terms of quality instead of how many appointments a physician has. Also, Medicare and Medicaid reimbursements are prompting hospitals, physicians and other healthcare organizations to make the value shifts. In response to the evolving healthcare cost, ways to reduce health care cost will be examined. When we lead towards a patient centered system organized around what patients need, everyone has better outcomes. The patient is involved in their healthcare choices and more driven in the health care arena. A value based approach can help significantly in achieving patient-centered care.
Healthcare is considered of one of the most complex business models in the American Industry because it is one of the only industries where the consumer actually does not technically pay for the service he or she receives (Kudyba, 2010, p. 2). When consumers go to nail salons or hair salons, he or she pays the beautician for the specific service he or she asks for. In the healthcare industry it is totally different and most consumers do not understand the complexity of this business model. The consumer actually pays insurance companies and the insurance companies pay the provider/hospital based on negotiation arrangements from the data exchanges they receive (Kudyba, 2010, p. 2).
In 2015, the Centers for Medicaid and Medicare Services (CMS) released the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) which implements the final rule which offers financial incentives for Medicare clinicians to deliver high-quality patient centered care.5 Essentially, taking the time to learn the patient’s goals and treatment preferences allows for the patient to walk away from the medical treatment or service feeling understood and cared for by the provider.4 Thus, resulting in a better, more comprehensive plan of care. Policy makers are hopeful that the new incentive-based payment system will accelerate improvement efforts.
The United States health care system is one of the most expensive systems in the world yet it is known as being unorganized and chaotic in comparison to other countries (Barton, 2010). This factor is attributed to numerous characteristics that define what the U.S. system is comprised of. Two of the major indications are imperfect market conditions and the demand for new technology (Barton, 2010). The health care system has been described as a free market in
...d procedures are now being monitored to improve clinical processes. Ensuring that these processes are implemented in a timely, effective manner can also improve the quality of care given to patients. Management of the processes ensures accountability of the effectiveness of care, which, as mentioned earlier, improves outcomes. Lastly, providing reimbursements based on the quality of care and not the quantity also decreases the “wasting” and overuse of supplies. Providers previously felt the need to do more than necessary to meet a certain quota based on a quantity of supplies or other interventions used. Changing this goal can significantly decrease the cost of care due to using on the supplies necessary to provide effective, high-quality care. I look forward to this implementation of change and hope to see others encouraging an increase in high-quality healthcare.
The cost of US health care has been steadily increasing for many years causing many Americans to face difficult choices between health care and other priorities in their lives. Health economists are bringing to light the tradeoffs which must be considered in every healthcare decision (Getzen, 2013, p. 427). Therefore, efforts must be made to incite change which constrains the cost of health care without creating adverse health consequences. As the medical field becomes more business oriented, there will be more of a shift in focus toward the costs and benefits, which will make medicine more like the rest of the economy (Getzen, 2013, p. 439).