Provider Payment: Fee for Service (FFS), Managed Care Plans

Provider Payment
Name
Affiliation/Institution
Date
Provider Payment
Provider Payments and cost-containment: Lessons from OECD countries is a 2007 document that was written by Munjoo Park, Thomas Braun, Guy Carrin, and David B. Evans. The four authors are affiliates of the World Health Organization and wrote the article to explain how the OECD countries contain their public’s spending on health care as well as how they handle the provider payments. This article focuses solely on OECD countries helps to expound on how the member states contain the cost of healthcare as well as the various provider payment schemes that are used in the countries mentioned above. Through their struggle to contain and curb their public spending on health care, OECD countries devised many ways and schemes. These plans and methods are not at all perfect but have helped to ensure that health care costs are contained and do not go beyond certain thresholds.
While reading the article, one gets to comprehend the need for cost-containment and provider payment schemes not only in the OECD countries but also in the rest of the world. It is clear that total expenditure on health care and GDP do not increase at the same rate, and this is not a fact that is worth ignoring. It is indeed essential for the world to make sure that equilibrium is maintained. This will help many countries avoid budget deficits and debts in the long-run. As per the article, OECD countries have realized the need to preserve a balance between expenditure on health care and their economic growth and hence the inception of the many cost-containment and provider payment schemes.
It is an open fact that OECD has some of the wealthiest countries in the world as its members. However, comprehending the fact that they also struggle with issues such as increasing expenditure on healthcare should not be a grim task. Cost-containment, according to Park et al. was coined more than three decades ago and it is no coincidence that it came into existence during the global economic recession. However, cost-containment and provider payment were not used universally in the OECD countries until the 90s.
Currently, cost-containment has become popular in the OECD countries and has been universally adopted. Cost-containment instruments are classified into four groups. The first two are based on monetary or non-monetary incentives while the other two are for whom they are designed (consumers or providers). Many OECD countries currently largely focus on monetary incentives that target providers but are also using non-monetary incentives to regulate the provider behavior.
Provider payments are also popular in the OECD countries, and pundits believe that they are just as effective as or more effective than cost-containment instruments in influencing providers’ behavior. The most common or popular provider payment schemes in the OECD countries include salaries, diagnosis related groups, fee-for-service payments, capitation or per-diem payments. On wages, governments ...