HSA 5174 Fundamentals of Healthcare Finance

The aim of the report was to analyze the present scenario of the healthcare financing in the United States. It deduces the importance of inculcation of the available models for payment in the healthcare sector.

Introduction:

The initiation of financing in the health care industry of the United States of America (USA) in the early 20^th century. It is involved in the mobilization of the funds that are given for the health care industry. It also facilitates fund allocation to the populations and regions for varied types of care processes in the healthcare industry (Barr, 2016). The need of financing in the health sector is high, it is required to commemorate the growth of Gross Domestic Product (GDP). It is essential for making the funds allocated for the health care purpose available for the for the people it is allocated (Rice et al., 2013). It also ensures accessibility of the funding to the public health services.

Payment models available for the financing in the health care sector:

There are several models available for process finances in the healthcare sector of the United States. There are basically eight models that are being implemented by the departments involved in the health care industry (Burwell, 2015). The first model is called pay for coordination; it involves the process of coordination between the primary caregiver and the practitioners or specialists who are taken care of the concerned case. this process helps the patients and their families to have a unified plan for taking care of the patient. The second model under consideration is the pay for performance model also known as the reimbursement based on values; in this model, if the care providers meet the gauged efficiency and quality of the need treatment and care giving, the personnel are compensated. This procedure enhances the procedure in which the practitioners and caregivers work. The third model is the payment based on episode care also called as bundled payment. This type of payment, reimburse the care providers for certain specific interval of caregiving session (episode). This model also encourages the betterment in quality of caregiving process. The next model under consideration is the program of upside shared saving; this model is followed by the Medicare centers (Rudoler et al., 2015). the program provides the caregivers and practitioners with incentives with respect to the population of a certain type of patient. The model is generally followed for a period of three years by the health personnel and then they have to move to the program of downside shared saving. The program of downside share saving also incorporates the gain involved in the model of upside share saving but this model has a risk of excessive cost cutting for care delivery between the caregiver and payer. The next model is called the partial capitation or full capitation model. The patients in such models are as members of certain schemes on a monthly basis, based on the patient’s age, sex, lifestyle, race and medical history. The rates are estimated on the basis of the expected usage by the patient or client (Weaver et al., 2016). The model incorporates only specific types of categories of health issues irrespective of the number of visits of the patient to the health care center. The global budget model is another model that is under implementation in the United States of America; it involves the payment of a fixed amount of dollars all the health care, provided to a person, the payment is done annually and the amount is always fixed (Shrank, 2013).

The fee for service model currently under implementation is largely different from the other models discussed as it incorporates the payment procedure in a way that requires the client or patient to pay separately for separate health related issues (Porter & Lee, 2013). It is one of the first and traditional model that came into existence. The models also the facilitates the payment of incentive to the physicians and other clinicians, as varied number of cases require more treatment than the others.

Comparison between the payment models in health care industries to that of the other business sectors:

The payment models that the other industries follow majorly vary from the models followed in the health care sector. The need of following the rules in case of health care sector is of higher significance than the other industries and businesses as they have a direct impact on the health of the public (Daly, 2015). The models involve the incorporation of payment on the basis of percentage of task done by the employee, the basics are same but the incentive division are generally done on the basis of their performance. There are not many models available in the other industries as the necessity is minimal in the other sectors.

Factors responsible for transfer from fee for service model to the value based or outcome based model:

The traditional model of fee for service has many drawbacks associated with it. The existing model comprises of methodologies that considers the payment of money on every visit to a health care center. This process ceases many citizens from visiting the centers to avoid payment of such high bills. The paperwork done by the physician as per the model, mentions the involvement of both the patient and the insurance providing company. The percentage of payment to be done by both the parties is not mentioned under this model (Teno et al., 2013). This rises several speculations among the service providers and the clients. The coverage of this model is restricted to the serious health problems, it does not cover the expenses involved with preventive measure and the physical programs. On the other hand, the model of reimbursement based on values is far more cost effective as compared to the available traditional model. It does not include the division of payment on every health issues unlike fee for service model. The value based model is highly feasible than the traditional model, hence the government is encouraging its implementation in the health care industry.

Conclusion:

Therefore, from the above discussion it can be concluded that, the inculcation of the available models in the present scenario is of major importance as it increases the inflow of patients as a consequence of reduction in the cost of medication and treatment the models provide. The inculcation of such models also improve the quality of care provision by the practitioners and caregivers by providing them with incentives and other benefits. The models available in the healthcare sector, differs from that of the other industries as the type of work that they deal with is not the same. Health care finance should be given more importance to improve the quality of delivery of work according to the necessities of the stakeholders.

References:

Barr, D.A., 2016. Introduction to US Health Policy: the organization, financing, and delivery of health care in America. JHU Press.

Burwell, S.M., 2015. Setting value-based payment goals—HHS efforts to improve US health care. N Engl J Med, 372(10), pp.897-899.

Daly, R. (2015). CMS says provider interest growing in alternative pay models. Healthcare Financial Management, 69(11), 11-14.

Porter, M. E., & Lee, T. H. (2013). The strategy that will fix health care. Harvard business review, 91(10), 1-19.

Rice, T., Rosenau, P., Unruh, L.Y., Barnes, A.J., Saltman, R.B. and Van Ginneken, E., 2013. United States of America: health system review. Health systems in transition, 15(3), p.1.

Rudoler, D., Laporte, A., Barnsley, J., Glazier, R. H., & Deber, R. B. (2015). Paying for primary care: a cross-sectional analysis of cost and morbidity distributions across primary care payment models in Ontario Canada. Social Science & Medicine, 124, 18-28.

Shrank, W. (2013). The Center For Medicare And Medicaid Innovation’s blueprint for rapid-cycle evaluation of new care and payment models. Health Affairs, 10-1377.

Teno, J. M., Gozalo, P. L., Bynum, J. P., Leland, N. E., Miller, S. C., Morden, N. E., ... & Mor, V. (2013). Change in end-of-life care for Medicare beneficiaries: site of death, place of care, and health care transitions in 2000, 2005, and 2009. Jama, 309(5), 470-477.

Weaver, C. A., Ball, M. J., Kim, G. R., & Kiel, J. M. (2016). Healthcare information management systems. Cham: Springer International Publishing.