Hospital Payment System

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Recommended: Coordination within health care organization

Shih reported that the fee-for-service creates division and prevents integration. As a result, Shih recommends a bundled payment system that rewards coordinated, and high-value care (as cited in Essential Hospitals, n d.).
Essential Hospital discussed five payment methods for integrated delivery systems (IDSs).
1. Shared Savings: It is vital for both hospitals and physicians to benefit from savings, and thus must collaborate efficiently. IDSs assist with this endeavor. According to Essential Hospital (n.d.), “Participants are rewarded for better outpatient care as defined by performance on quality measures. They are also eligible to share some of the savings from better overall cost control, particularly reduced hospitalization rates”.
2. Blended Payment for Primary Care: …show more content…

4. Bundled Payment: This payment involves amalgamating both physician and hospital payments together. Essential Hospitals (n.d.) stated, “According to the Center for Medicare & Medicaid Innovation (Innovation Center), bundled payments are believed to encourage doctors, hospitals and health care providers to work together and better coordinate care for patients throughout their experience”.
5. Capitation or Global Payment: A capitation contract involves physicians receiving an exact amount of money per patient (per-member/per-month). As a result, physicians bear the financial risk. Thus, they are not paid for additional or extraneous treatment services administered to their patients. “Full capitation, or global per-member, per-month payment, would strongly incentivize efficiency and coordination between hospitals and physicians” (Essential Hospitals,

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