Kevin Quinn breaks down the eight basic payment methods in health care:

1. Per Time Period
2. Per Beneficary
3. Per Recipient
4. Per Episode
5. Per Day
6. Per Service
7. Per Dollar of Costs
8. Per Dollar of Charges

Each payment method corresponds to a division of financial risk between payor, provider, and patient. On this scale, financial risk moves from being on providers (time period) and shifts progressively to payors (per dollar of charges). 

For example, if a doctor is being paid per time period, they may have less financial incentive to perform treatment (they don’t make more for the services they perform). 

Conversely, if a doctor gets paid for every service they perform, they may have a financial incentive to encourage the patient to purchase more services, despite them not being medically necessary. 

Often, these payment methods are blended and continually re-optimized to balance incentives to create improved patient outcomes at the lowest cost.

Payment Methods in Healthcare— Kevin Quinn

If interested in the type of payment breakdowns, this is a great report on how healthcare is currently being paid for.We have been witnessing a shift away from direct fee for service payments towards a more balanced payment structure in recent years. 
 
This site provides data around payment methods for care:
 
- 41% Category 1 (Fee For Service)
- 25.4% Category 2 (Fee For Service with a Link to Quality & Value)
  - Either payers lower FFS en masse and use the funds to reward hospitals based on how well they perform across process, quality, and efficiency measures
  - Or hospitals are financially penalized for subpar performance (often times these funds are put into an incentive pool)
  - See [definition](https://catalyst.nejm.org/doi/full/10.1056/CAT.18.0245)
- 34% Categories 3 and 4 (e.g. shared savings, risk, bundled payment, or population based payments)
  - See [definition](https://www.aap.org/en-us/professional-resources/practice-transformation/Implementation-Guide/Pages/Understanding-APMs.aspx)

Statistics on Types of Provider Reimbursement Schemes

A landmark piece from Atul Gawande in 2009 examining the highest healthcare spending market in the USA in McAllen, Texas and investigating the reasons why. In McAllen, Medicare costs were $15,000 per enrolee, nearly twice the national average in 2006 (please mind that this is an examination of pre-Obamacare healthcare, though many of the lessons are still pertinent). He ultimately found a series of incentives for system overuse and for physicians to request high-cost treatment options. He does point to the Mayo clinic as a model that works.
 
Here is a great podcast between [Gawande and Tyler Cowen](https://medium.com/conversations-with-tyler/atul-gawande-checklist-books-tyler-cowen-d8268b8dfe53)

Payment Systems in Action— Atul Gawande

The various methods by which providers (doctors, nurses, etc.) get paid.

The U.S. Healthcare System— How Providers Get Paid

Mar 16, 2021 • 3 blocks

acpjournals.org

No comments yet.

hcp-lan.org

No comments yet.

newyorker.com

No comments yet.