As the payment methods for healthcare are being adjusted to cater to the clients’ needs, numerous policies are implemented to enhance the quality and efficiency of treatment. Thus, the healthcare sector is enforcing new reforms associated with the payment to provide patients with high-quality care. In addition, policy efforts are focused on producing comfortable and practical conditions for payers and providers to notify patients regarding price perspectives.
It is vital to thoroughly research the traditional payment system to understand the efficiency of implemented innovations regarding payment to the healthcare sector. To begin with, according to Mathauer (2017), patients were required to cover the spendings of the hospital on the medicine, equipment, and employees’ salary before receiving the treatment itself. Furthermore, the healthcare sector’s operations were directly dependant on a fixed amount of funding to cover aggregate expenditures to cater to the patients’ needs.
In addition, the line-item budget ensured the funding of only specific hospital expenditures, but without opportunities to move these funds across the budget lines. The healthcare sector reduced costs on each patient and avoided increasing the severity of one’s case due to the case-based retrospective (Mathauter, 2017). Furthermore, admitted patients used to also benefit from the per diem policy since the costs per day were reduced considerably.
The reforms in the healthcare sector included not only the enhancement of the previously stated model but the enforcement of blended payment systems that enable different mechanisms for individual and primary care providers. Such a system is based on a fixed payment amount for an estimated activity level (Jia et al., 2021). Moreover, with this innovation, providers are exposed to risks related to the excess costs with commissioners (Jia et al., 2021). Still, the healthcare sector benefits from the reform as hospitals are rewarded for advancements in health outcomes.
The blended payment systems are further separated into three types: add-on, bundled, and population-based payments. The add-on payment model is widely employed by the Centers for Medicare and Medicaid Services to reward hospitals with extra fundings for technology breakthroughs (Organisation for Economic Co-operation and Development, 2016). The same strategy is enforced with a population-based program: healthcare institutions are paid according to the number of residents.
As stated, the healthcare sector is implementing new policies in the payment system to improve the patients’ quality and experience after receiving the treatment. Thus, according to McClellan et al. (2017), the aligned model of payments is essential for providing clients with more satisfactory conditions for covering healthcare expenditures. In other words, innovations yield fruitful benefits to healthcare institutions and admitted patients by focusing on catering to the needs of the second more.
However, the elimination of reforms that produce suitable payment settings for both sides might result in a decrease in care quality. In other words, a non-aligned payment system might lead to establishing uncoordinated incentives to providers that would negatively alternate their performance. As a result, the healthcare sector’s efficiency and performance may decrease, resulting in admitted patients’ worse care.
To sum up, it is fair to claim that aligned payment systems are beneficial in fulfilling the needs of both parties: payers and providers. Therefore, to maintain fruitful progress in the healthcare sector, it is vital to further focus on producing comfortable settings for institution operations through convenient price perspectives. Provided that the aligned payment system is not reached, the providers might become less involved in providing clients with high-quality treatment, reducing the efficiency of healthcare in general.
Jia, L., Meng, Q., Scott, A., Yuan, B., & Zhang, L. (2021). Payment methods for healthcare providers working in outpatient healthcare settings. Cochrane Database of Systematic Reviews, 2021(1).
McClellan, M., Feinberg, D., Bach, P., Chew, P., Conway, P., Leschly, N.,… Teetr, D. (2017). Payment Reform for Better Value and Medical. 16.
Organisation for Economic Co-operation and Development. (2016). Better ways to pay for healthcare. OECD: Better Policies for Better Lives, 1-3.