Reimbursement and Pay-For-Performance - Essay Example

Reimbursement and Pay-for-performance Affiliation: Define pay-for-performance. This is a reward system by health insurance to its stakeholders for meeting certain stipulated or performance measures (most of which have to do with quality and efficiency of the services). This system also acts as a type of compensation measure for the quality of work performed by its stakeholders. The work includes provision of information to the health insurance about their services and how they can be improved to suit the client better, information on clinical quality and even health safety, adoption of information technology in health for efficiency and even information about patient experience. This information is provided by physicians, medical groups or even hospitals since they are in constant touch with the clients of these health insurance and some of them are also clients. The compensation depending on the agreed terms may be in form of elimination of payments and other non-financial incentives (Greenwald, 2010). Explain how reimbursement is affected by the pay-for- performance approach. Reimbursement works on a fee-for-service initiative where the physicians are paid according to the services they offer and not the quality of those services. Since this is not the original pay for the physician but rather a reimbursement, the number of needed services may not be provided (especially if there is no reimbursement or it is not much). This has in turn led to undersupply of the needed services by the clients when compared to the pay-for-performance approach. The pay-for-performance approach requires evidence of the services offered which should be quality services before any incentive of compensation is made (which may be financial or not). This new approach has overridden the reimbursement approach and is seen to be more client-concerned than the earlier approach. The physicians also have no alternative but to work towards providing the quality services that they were not concerned about earlier. Even though the reimbursement approach is not being faced-away by the pay-for-performance approach, those who are paying are allowed to choose between the two approaches and most are going for the latter considering its advantages over the former approach. This therefore means that the reimbursement approach is slowly but surely failing and becoming out of touch. The new pay-for-performance approach is also seen as a way to correct the distortions incentives that have and are continuing to be made by the reimbursement approach. This is because the reimbursement approach pays physicians double for the services they render which are even not of quality at times. The newer approach is therefore trying to face-out this behavior of double pay and concentrate more on provision of quality services and realignment of services by physicians towards prevention. Discuss how system cost reductions impact the quality and efficiency of health care. The impacts from reducing the system cost in healthcare are both positive and negative. One of the positive impacts is that system cost reduction has meant change from manual to electronic and other technological ways to manage healthcare issues. One of these is the use of electronic health records which has reduced the hospital spending on duplication of work and test, interlinking of departments hence reducing staff like messengers, reduction of paperwork and other spending which are now being catered for by the new technology. This has ensured that the quality is even better with more efficiency and at a reduced cost. The negative impacts however override the positive one. With less money being provided by the healthcare system, less nurses, doctors and other medical personnel will be hired and this means that the ones present are overworked and hence do not provide efficient and quality services to their patients and clients. Even if a healthcare facility will have adequate medical personnel per patient, they will be underpaid and hence their service performance will not be up to standard in terms of quality and efficiency. System cost reduction also means that the government insurance reduces and hence those who cannot afford private healthcare insurance are left to suffer and receive poor services, low quality healthcare services and others receive no services at all since they cannot afford healthcare without insurance. The quality and efficiency of the healthcare therefore continues to reduce with every reduction in the system cost. Hospitals will also not be funded enough when costs are reduced and this therefore leads to hospitals with no facilities to cater for patients with especially chronic or terminal illnesses like cancer among others. The others may not have modern and up to standard equipment or may lack basic facilities and this leads to poor services being rendered with no efficiency at all. Discuss how pay-for-performance affects health care providers and their customers. As mentioned earlier, pay-for-performance is a reward system for quality performance to the stakeholders. Health care providers that do not meet the quality performance measures indicated by the pay-for-performance receive less or no incentive at all. The continuation of this trend will lead to these poor-performing health care providers discourages them even further and demoralizes their efforts at serving their clients. Health care providers have also started putting all their efforts in trying to meet the quality standards of the pay-for-performance approach and pay less attention to the patients who do not contribute to this performance measure especially those with chronic diseases (the approach measures are geared towards prevention measures). The health care providers therefore start avoiding some cases and illnesses which will not make them meet the performance target. This payment system emphasized by the pay-for-performance approach does not benefit the really sick patients or patients with severe behaviors. This is so because treating of the really sick patients requires a lot of time and effort and this therefore means that the performance measures set will be less than for those treating less sick patients (as they can treat more people within a short duration). Health care providers therefore neglect the severe case and those patients with more complain. Other than the above mentioned issues, the approach benefits majority of the patients since the health care providers now offer their quality services to the patients with the hope for more incentives. The more rewards the health care providers receive, the more they will be encouraged to continue with offering services to the patients. Discuss the effects pay-for-performance will have on the future of health care. If the payment system is used according to the original plan, it can help reduce some of the distortions that have been evident in the past with other payment systems since accountability, efficiency and quality is being ensured by the health care providers. With the challenges of the pay-for-performance payment approach being aired by various researchers and medical personnel, redesign of the system can be made and this will improve the quality of health care even further (Greenwald, 2010). The system as it currently is will continue to increase disparity in medical services offered to the patients depending on the illness of the patient. Neglect of the sick patients and those with chronic diseases will continue to increase because they do not enable the physicians and other health care providers to get more incentives form the payment system. The healthcare providers in the long-run will completely neglect the other services that come with dealing with complicated illnesses like teaching and hence leaving a few citizens to suffer and this therefore will reduce the health care quality. This payment incentive scheme will lead to poor-performing hospitals to have fewer finances to invest in quality health care and this will again lead to them having reduced quality performance incentives and the vicious cycle continuing. The individuals relying on that hospital therefore will continue receiving inadequate health care services and the health care providers being more demoralized in their work and even act to damage the reputation of the hospital and health care in general. References Greenwald, H. P. (2010). Health Care in the United States: Organization, Management, and Policy. New Jersey: John Wiley & Sons. Read More