551 Unit 4 Discussion: Third-party Payment
Third-party payment systems can distort the market for health care by reducing price sensitivity, creating misaligned incentives, increasing administrative costs, impeding price transparency, and fragmenting care delivery. Third-party payment is a system where a health insurance company or government program, such as Medicaid, pays for a significant portion of someone’s healthcare expenses. An important thing to address with addressing these distortions is value-based care as this can help. McLaughlin (2021) states that Medicaid programs are helping with accelerating the adoption of value-based payment programs. Medicaid programs are also addressing social determinants of health (McLaughlin, 2021).
Shearson and Gregg (2019) state that there are distortions in healthcare because of competing goals and layers of payment. I also found it interesting how Shurson and Gregg (2019) also found that there is a lack of literature on nurse practitioners and reimbursement. Ultimately, third-party payment programs refer to several things including health insurance, government-
funded programs like Medicaid and Medicare, employer-sponsored health plans, Health Savings
Accounts, Flexible Spending Accounts, and non-profit organizations. We are moving away from a fee-for-service type of reimbursement towards a pay-for-performance model to decrease overuse by providers but the compensation for providers has not changed, therefore healthcare reform needs to focus on this and not just organizational reimbursement (Shurson &
Gregg, 2019).
References
McLaughlin, D. B. (2021). Medicaid: A leader of healthcare innovation. Healthcare Executive, 36(3), 40-41.
Shurson, L., & Gregg, S. R. (2019). Relationship of pay-for-performance and provider pay. Journal of the American Association of Nurse Practitioners, 33(1), 11–19. https://doi.org/10.1097/JXX.0000000000000343
