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ECO: Capitation - Assignment Example

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ECO: Capitation

In distinction with a DFS, capitation reimbursement gives a chance to the Managed Care Organization (MCO) to shift almost all the risks and cost of health care to the provider. In most cases, the provider is not allowed to request the MCO or any individual for extra reimbursement even if the amount used is far beyond the projected amount (Niles, 2010). Diagnosis Related Groups (DRGs) In the Diagnosis Related Groups health care program, DRGs pays health care providers are paid on prospective terms while factoring in diagnoses and procedures. These are determined and classified to give them codes referred to as diagnosis related groups (DRGs). The allocated codes show a monetary value to show what the services rendered to the patient should cost. The government pays health care providers a flat charge for each DRG. This charge doe not depend on the number of days an individual spend in the health care facility or the actual cost of care. The health care provider is obliged to administer its costs within the DRG charge (Niles, 2010). Future of Health Care Reimbursement One area where changes are taking place is in the business of health insurance and health care delivery. Increasing health care costs have become a major national issue. In the early 1990s, it seemed likely that there would be significant changes in the health care delivery based on federal health care reform. It now appears that legislative reform will occur primarily at the state level if at all. But regardless of what happens in the state and national legislatures, market forces almost certainly will continue to produce sweeping changes in American health care reimbursement system. The driving force behind market place reform is in the need for employers to decrease, or at least stop, the cost of providing employee health care (Niles, 2010). Many health care practitioners suppose that more than half of all health care costs-- the costs of overstuffed transactional procedures as well as unsuitable measures, service sites and prescription drug levels offer no worth (Health care policy, 2012). “For perspective, this year we'll unnecessarily spend nearly $1.5 trillion on health care, an amount equivalent to the budget deficit. Though we continually have given physicians and the health care industry a pass on this issue, its impact can be understood as the difference between our national prosperity and decline. (Health Care Policy, par 3) The present reimbursement undervaluing of health care is one of the challenges distressing the health care reimbursement. The other challenges affecting the service include fee for service reimbursement and the absence of cost, quality and safety intelligibility. These challenges lead to extra spending and prohibit hospitals from operating in a true market (Health care policy, 2012). Health Care Reimbursement and Student Organizations Changes in Medicare policies governing payment to physicians providing care services in teaching hospitals also have the potential to affect adversely the Graduate Medical Education institutions (GME) activities. Recent changes in the regulations governing payment to teaching physicians place new requirements on the role of teaching physician in the patient care activities of resident physicians as their documentation of that role in the medical record. Because approximately two thirds of the costs for the GME program activities at ...Show more


Capitation Capitation can be defined as monthly repayments of a permanent value of health cover evidently stated services for a given populace on a per-member per-month basis. The health care provider who accepts the use of capitation takes the financial risk of ensuring that individuals are provided with efficient and defined services…
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