Chebaiywa Clinic Case

The payment system in the healthcare industry has appealed to specialty care providers, they make a higher income than the primary care physician. The physicians are attracted to specialty care, and the individual feels that specialty care is better. If physicians were all paid well, in order to pay for their education and then continued quality training, we would not be confronting the lack of primary care doctors who are available to treat the general needs of the population (Fisher, 2013). Just as the physicians seem to be treated differently in our health system so are the patients. Using a multi-tiered system of health care where some insurance gives out a higher payment to physicians, some patients seem to be wanted while others are less well received, this leads to an “everyone for himself or herself ethic” within our medical system (JAMA, September).” The design of the system is flawed in reference to the primary care physician and with the patient who has insurance which pays less, the way to reorient both is to make the pay scale more competitive for both. The primary care physician should be able to make money and cover this educational expenses and the patient should have insurance that will equate to

A mixed payment system combined with physician monitoring, will provide physicians with incentives to consider costs and benefits of different treatment options, which will lead to an efficient level and quality of care. (1,2)

Financial Incentives for Primary care: Comparison costs of practices using PCMH model to those that do not and achieved savings (by reducing hospital admissions and unnecessary tests, they can get half $ back. The catch is that they only get the $ if they’ve met a whole checklist of quality measures for preventive care, chronic disease management and so on. Primary Care is rewarded for efficiency without sacrificing quality. Half of savings goes to Geisinger’s own health plan that funds extra services and creates medical homes. The health plan earned 2.5 times its R.O.I. back in the first year.

The CMS will provide reimbursement funding for services to citizens. However, when accepting monetary resources there comes much red tape to cross. Providers then weigh the advantages and disadvantages. The disadvantages of red tape and the minute amount of reimbursement create reluctance for providers to offer services. In the end, the citizens

An efficient health care system is one that treats illnesses in the most cost-effective way. When a patient is given a choice between therapies, an efficient system will use the less costly of the two, other things being equal. But, as of right now the U.S. health care system, meaning, patients and their doctors do not always choose less costly therapies because they face distorted incentives. On the average, every time a patient spends a dollar on medical care, only 21 cents comes out of

On the same level from a patient’s perspective, providers are even challenged with increased costs. Even though insurance is becoming more affordable the money, unfortunately has to be recovered utilizing other

* we did not take time of the different dental procedures into consideration. This is because I thought that the clinic would never get full, so there would never be a bottleneck situation where patients would have to wait that long that they would leave for the competitor.

One area that has contributed to the rise of healthcare costs are the varieties of healthcare services offered to the patient. Competition between providers has caused physicians and hospitals to offer the most current healthcare technologies and modern, eye-catching settings in order to attract and retain clients (Shi & Singh, 2015). Reimbursements for costly procedures and hospital services have been compensated at a higher rate which has also supported the expansion of hospital and specialty procedure settings (Schroeder & Frist, 2013). Renovations of the physical settings and the acquisition of expensive technologies have elevated healthcare services prices to encompass the additional costs of providing high technical services and attracting clients and cause the over-utilization of expensive treatments.

Another issue for fee-for-service system is that the providers set the prices for services. Patients were free to seek any type of healthcare services that they thought they required, while providers set the costs for each service that was billed to indemnity insurance companies (Shi & Singh, 2015). Insurance companies had little control on the types of services that the patient received and prices billed for each service. The fee-for-service model encourages excessive and unwarranted procedures and offers no incentives to utilize economical services (Smith, 2010). While the patients enjoy the freedom of being able to seek out their own services, over-utilization of expensive services on unnecessary and highly technical services increased healthcare costs.

Because the rate all payers pay are generally the same (by categories of procedure), providers have no incentive to compete and provide better service. Providers who provide higher quality care are rewarded just as much as those who provide lesser quality care. Even though an all-payer system would shift provider's focus from the patient's socio-economic status, it would eliminate the incentive to improve the quality of service as the reward for quality is limited to morality, not money. A possible solution of this is to have an all-payer system, with adjustment to rates based on the quality of health care provided (rather than inflating some payers to cover the discounts of payers who pay

This worldwide phenomenon has been brought into focus by various health care reforms and other system-level developments (Farrar, Ryan, Ross, and Ludbrook, 2000). Meaning there are more claims on resources than there are resources available, some form of priority setting must occur. This making resources are scarce and there is a need, regardless of how many resources are available in total, to make choices about what to fund and what not to fund.

In conclusion, a structure on lower cost is pertinent to providing the right model for the system. Achieving a prosperous medical outcome in the end requires a cost budget that will benefit not only the Health care organization but the patients as well. Another benefit for patients is to implement a low cost strategy that will allow patients to receive medical treatment and also pay out cost that meets the individual’s budget. Creating an income chart would also be a way to know what a patient can afford to pay.

Under capitation, physicians are given incentive to consider the cost of treatment. Pure capitation pays a set fee per patient, regardless of their degree of infirmity, and gives physicians an incentive to avoid the most costly patients (Miller, 2009). Providers who work under such plans focus on preventive health care, as there is greater financial reward in prevention of illness than in treatment of the ill. Such plans avert providers from the use of expensive treatment options. The proponents of this method of payment especially insurance companies argue that when health care providers are not paid extra for additional office visits any associated medical expenses, they are likely to be more conservative with their treatment assessments

Under payment, an ideal healthcare system will have the challenge of delivering higher quality for lower costs. The system’s payment reform will involve a transition from fee-for-service to global from systems that are value-based important for the achievement of the overall healthcare goals. An ideal healthcare payment system will give a great deal of support to value-driven system of healthcare delivery (Kent, 2013). The fee-for-service payment system will be of great importance to the healthcare system as it will help control the costs of health care.

5. The project is assumed to end in year 4. Do you think that this is realistic? Can you estimate the value of the project’s operating cash flows beyond year 4? State any assumptions you made.