Paying for Hospital and Physician Services Management Essay

Paying for Hospital and Physician Services
Student Name
Institutional Affiliation
Paying for Hospital and Physician Services
1.0 Introduction
There are various methods of reimbursement that are used by third party payers. This means that patients access healthcare services which are paid through different methods. The methods differ in the manner in which the payment is done, as well as the approach that the healthcare providers use in determining which patients can access the services. Although there are various reimbursement methods in America, the primary ones include fee-for-service, capitation, the episode or bundled payments, and the pay for performance model. There are various incentives and risks associated with each of them, and therefore patients have to choose wisely to enjoy optimal benefits and access to care.
2.0 Reimbursement methods used by each of the major third party payers
There are various reimbursement methods that each of the major third party payer can access. The primary ones are described below.
2.1 Fee-For-service
This is done for specific and individual services offered to a patient (Miller & Mosley, 2016). Each of the services provided is billed and paid for.
2.2 Capitation
In this model, prepayments to medical groups or physicians are given depending on the pre-defined services provided to patients (She, Ayer, & Montanera, 2020). Calculation of the compensation is done based on the range of service that the patient receives, the number of patients who have been involved, and the duration of time the patient received the services.
2.3 The episode or Bundled Payments
These are usually single payments which are meted out for a certain group of services which are related to a condition or treatment which may involve numerous healthcare providers in different settings (Mok, Martinez, Smith, Sciubba, Passias, Schoenfeld, & Association for Collaborative Spine Research Investigators, 2016).
2.4 Pay for Performance Model
This is considered a financial incentive or payment which is associated with meeting measurable and defined goals which are related to the health care outcomes and processes, resource use, patient experience, and other factors (Mendelson, Kondo, Damberg, Low, Motъapuaka, Freeman, & Kansagara, 2017). Recent reforms in healthcare recommend adoption and integration of this model.
3.0 Incentives and the risks for the providers under the various payment types
There are various incentives and risks associated with each of the various payment types described above. Such are shown below.
3.1 Fee-For-service
Incentives
The method maximizes patient visits and encourages delivery of healthcare, and it is flexible and it is applicable in different organizations regardless of their size or structure (Liu, Dharmarajan, Henschke, & Taioli, 2020). It also ensures accountability patient care, but it depends on the scope of the services that the physician offers.
3.1.2 Risks
It provides little or zero incentive to ensure delivery of effective care or preventing unnecessary care. It also only works on a face-to-face basis, and it hinders management and coordination of care through other means (Matlock, Groeneveld, Sidney, Sh...