7 July 2016

Financing health care is one of the many issues that consumers have with health care in the United States. Therefore, paying for health care is a very intense issue in health care. The ability to finance health care allows the ability to receive health care services. Without health care services many health care consumers would find it hard to live or find their life expectancy shortened. Hence, the importance of the correlation of finance and health care. There are different options consumers have to finance healthcare.

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Health care insurance is usually the way that many people are afforded to pay for health care. Health insurance allows the providers of health care services to be reimbursed for any services that they deliver. Financing has a prodigious influence on how the structure of health care is revolutionized and how health care is delivered to consumers. There are several reimbursement payment methods that allow providers to get paid for the services the provider gives. Possessing the ability to have different payment methods allows for consumers to receive the best health care services available.

Pay-for Performance (P4P) is an example of how reimbursement is changing the quality of health care a consumer receives. What is Pay-for-Performance? “Pay-for-Performance is a reimbursement plan that links payment to quality and efficiency as an incentive to improve the quality of health care and to reduce costs” (Shi & Singh, 2012, p. 586). Pay-for-performance is known by many names such as merit pay, performance related pay, P4P, or PFP. Pay-for-performance is an budding movement in health financing that has been around since the early 2000’s.

However, it has seen a surge in popularity due to Affordable Care Act. The proposals within the act entail that providers who participate in Medicare engage in events that will evolve to pay-for-performance over the course of the next three to four years. Pay-for-performance comprises the idea that providers should be paid for health care services based on the quality of the service that they provide. The idea is that by creating payment to providers to depend on quality of service, consumers will get better care and health care results will improve over time.

Pay-for-performance is projected to enhance the delivery of the quality of health care and reduce the health care costs over a prolonged time. Therefore, reimbursement is made to the providers or doctors that can give the best care to consumers. How reimbursement is affected by the pay-for- performance approach? Reimbursement for a provider’s health care service would rely specifically on improving the quality of heath care, efficiency, and overall value of health care. The criteria that providers would have to follow would be the providers guiding pay scale.

This would majorly affect how health care services were administered. Many other payment reimbursements do not reimburse for the health care services but pay healthcare providers. Pay-for-performance does not pay for what the doctors do. Pay-for-performance pays for how well the provider deliverer the service. The providers have a list of criteria that they know in advance that they have to meet to receive those payments. Also, pay-for-performance systems can also impose financial punishments to providers that fail to accomplish goals or cost savings.

According to Health Affairs, (October 2012), “The quality measures used in pay-for-performance generally fall into the following four categories: (1) Processes, (2) outcomes, (3) patient experience, and (4) Structure” (p. 2). Thus, each provider using pay-for-performance systems would have to follow the guidelines that encompass the four categories to get any financial retribution. Reimbursement is going to be very different than what it was years ago. Providers will put more effort into the care that they give because they can receive a bonus or actual lose money if the quality of care is not up to par.

How system cost reductions impact the quality and efficiency of health care? Cutting provider reimbursement could result in reduced consumer access to care. Pay-for-performance is limited by a number of problems, mainly connected to a limited clinical focus, shortage of coordination among programs, and payment models that have problematic incentives. A study done by the Mathematica Policy Research Inc. and the Center for Studying Health System Change found the following: Most P4P programs rely on a narrow set of quality measures aimed at a limited number of services and patient groups.

To the extent that P4P incentives are effective, some are concerned that providers might focus their attention to patients with conditions that relate to quality measures (i. e. , “manage to the metric”), jeopardizing performance on quality dimensions that are not measured. Differences among payers in the quality measures that are used and how financial incentives are structured may produce diffuse and ineffective incentives. In addition, the lack of coordination across P4P programs and quality measures leads some to believe that current P4P programs fail may to encourage care coordination and communication among providers.

Most P4P programs supplement fee-for-service and capitation payment systems, and the funds available through P4P programs (while they have increased) still account for small percentages of provider reimbursement. As a result, P4P programs as they now exist may not effectively mitigate the volume and efficiency incentives inherent in fee-for-service and capitation payment. When P4P programs include health outcome performance measures, providers may be at risk not only for the quality of care they provide, but potentially also for patient behavior and for outcomes of care that other providers render to that patient.

It can be difficult to determine which outcomes should be attributed to which providers in making P4P payments. In addition, providers may be concerned that outcomes-based P4P programs might penalize them for accepting sicker patients, encouraging “cherry picking” of the healthiest patients. While risk adjustment methods can be used to mitigate risk selection, methods to risk adjust at the provider level are not well developed. Because P4P quality measures often focus on specific clinical conditions, the data for a particular provider may be based on a relatively small number of patients.

This can make provider-level estimates imprecise or unstable, particularly when just one payer is implementing the P4P program. These issues may be addressed in a number of ways: by developing composite measures across clinical conditions, expanding the measurement time window, and/or developing multi-payer P4P programs (p. 3). What are the effects pay-for-performance will have on the future of health care? A pay-for-performance system affects healthcare providers and consumers in several different ways. Providers will have to be more accountable for the health care service that they provide.

Consumers will have the ability to get health care that they deserve and pay for. The future of medicine looks very different than it did years ago. Pay-for-performance will change the way that healthcare is financed and delivered. Pay -for-performance is the result of years of modifications in the measurement and reporting of quality and efficacy. Now that there is acceptable statistics to convince others that there is a quality problem in the United States health care system, it will be hard to not adopt the urge to use that same evidence to restructure an apparent flawed payment system.

Used effectively, pay-for-performance could remove some of the well-known misrepresentations generated by the principal structure of the current financing systems and help refocus delivery on critical aspects of health care. Conclusion Healthcare in the United States is at a huge crossroads. However, with pay-for-performance it may be headed to a new direction. Pay-for-performance has been around now for a while but with the surge of popularity health care is facing a huge change. While pay-for-performance systems are becoming more and more popular there are more and more people that develop ideas about the system.

Whatever those ideas that start to form there are a few things that can not be looked over. Pay-for-performance increases the benefits that are designed to increase the quality of care for consumers. Therefore, there is ability for pay-for-performance to create momentous developments in the quality and efficacy of health care. The effects are expected to be minimal if the pay-for-performance systems are not organized and a uniform vital payment system is not created among providers.

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