Explain Why Consumers Love Incentives

First implemented in 1985 by Aetna (previously U.S. Healthcare), P4P programs were used to reward top performers and improve outcomes (Bruno, 2012). The incentives were meant to improve the quality of patient care by basing incentives on patient outcomes. Conversely, fee-for-service reimbursements are based on the treatments and set limits on the amount reimbursed for services. Because of these limits, incentives for use of pharmaceuticals and non-invasive procedures can impact how physicians practice.

Moreover, we see that some providers are focusing on what providers do and how they get reimbursed rather than what the patient needs, which is a focus that does not prioritize quality of care and therefore does not align with the Triple Aim framework. The problem presented regarding this matter is that the health care system lacks a patient-focused care of medical conditions that puts patients and their health needs first. For example, when we think of provider reimbursement, it is not in the patient’s best interest for the system to only have a simple fee-for-service structure. A structure like this one will only lead to an increase of health care expenses. Also, it fails to incentivize high-value service, which also does not align with the Triple Aim framework health care providers should go by. It is very crucial for the health care system in the United Stated to find a better balance between medical groups reimbursement and patients needs in order to reduce the risk of overutilization.

The next factor to consider is competitive position and healthcare firms can substantially ensure higher quality of care when pricing there products and services at an increased level. Aside from pricing, cost is another major aspect since it can drastically affect a company’s competitive position. A hard investment would involve a MRI device that insurance companies or healthcare organizations could reimburse the office at a higher rate for providing the patients of improved cost-efficient results. As a result, such benefits accrue primarily from savings in drug expenditures, improved utilization of radiology tests, better capture of charges, and decreased billing errors, (Wang et al., 2003). Physician providers are always in competition with the latest and greatest technology, EMR system, and most effective medication for patients.

Looking forward, another interesting option for Canada would be the Group-based profit sharing programs. However their applicability in the short to medium term is unlikely because profit-sharing programs allow hospitals to provide bonuses to physicians based on hospital savings created when physicians coordinate their use of drugs and devices (quantity and market share discounts). That is, the more that a hospital purchases of a particular drug or device from a particular vendor/manufacturer, the more they benefit from quantity and market share discounts. Therefore, adding profit sharing programs to the current FFS system may provide a powerful way to align physician incentives with those of the hospital and of policy-makers. However, little is known about the effect of these programs on patient outcomes, as current regulation in Canada does not allow hospitals to pay physicians in such a manner. (1,2)

By sending mail directly or making personal calls to all the doctors, administrators, and any other relevant personnel as well as visiting them if possible, we can establish a relationship with the customers at virtually no cost. However, the expected time commitment for the product is the most important part of our marketing strategy. Firstly, we will have to determine the persons to contact at the hospitals and nursing homes. Secondly, our team will have to determine when and how often we contact the target audience. Lastly, we will need to work on our communication skills and make sure that we are striking the right tone and positively convincing them to switch to our product. The response we receive is going to be our yardstick for determining

Create value as perceived by the customer, which includes not only patients and residents, but also physicians, employees, and community members;

One major trend in the healthcare environment is the shift from volume based reimbursement towards value based reimbursement. Many provider practices remain on a volume based or fee for service reimbursement plan. This system tends to reward high quantity of services with less regard for the quality or performance of the service. However, with a renewed focus on value, reimbursement plans

Patients should be given an opportunity to shop quality healthcare providers, prices and services. We provide competitive prices and services at our radiology practices, patients are able to find this information with their local insurance company or online. The organization takes all measures not to violated HIPPA guidelines, by implement technology that will share patient information across the web without fear of violation of HIPPA. Patients seem to be very satisfied with this system; it saves them a trip to the office and provides immediate results of their exam. They’re able to follow-up or make decisions with their doctors to expedite the needed care. Transparency also has an competitive advantage. Organizations that list their services and prices, prompts other similar entities to match or beat prices, making it affordable for the

Championing a cause is a beautiful way for ordinary citizens to be involved in political activism. The modern party activist is more likely to be driven by purposive incentives than ever. This switch away from material and social incentives, driven by an increased awareness of social issues, has allowed party lines to blur in a way that has improved America's political sphere, and has allowed the increased participation of citizens in the democratic process.

Besides, the financial incentives for hospitals and physicians that belong to ACOs, Jaffery & Golden 2013, asked and then answered the question “why would providers join this program? One reason is to prepare for the future”. Fee-for-service reimbursement, which has been how hospitals get paid for their services rely solely on the volume of patient seen without taking into consideration the quality of care provided. Payers today, such as government, commercial insurers, employers, and individual consumers are now requesting on value -based-payment, which consist of delivering the highest level of care at a lower cost. The volume based system even though the traditional way of how payments are made is not a viable long-term option (Jaffery and Golden, 2013, p.98).

Historically, reimbursement has been Fee-For-Service (FFS): tied to volume of visits, hospitalizations, procedures, and tests. This reimbursement structure creates misaligned incentives and fragmented, suboptimal patient care resulting in burgeoning costs and a lack of focus on outcomes. As a result, CMS and the industry have been

How did it impress customers with tangible physical evidence that the clinics cared about them?

Besides, studies delving into the economics of the medical marketplace consistently find that a moderately higher or lower price doesn't change consumer purchasing decisions much, if at all, because in health care there is little of the price sensitivity found in conventional marketplaces, even on the rare occasion that patients know the cost in advance. Most hospital administrators defend such chargemaster rates at all, they maintain that they are just starting points for a negotiation. But patients don't typically know they are in a negotiation when they enter the hospital, nor do hospitals let them know that.

In all industries, competition among businesses has long been encouraged as a mechanism to increase value for patients. In other words, competition ensures the provision of better products and services to satisfy the needs of customers (Glover & Rivers, 2009). In the health care industry, competition has an impact on many relational perspectives. There have been several studies examining the relationships between competition and quality of health care, competition and health care system costs, and competition and patient satisfaction. Some elements of competition in health care are price, quality, convenience, and superior products and

Hospitals and health systems in the U.S. are experiencing a remarkable transformation in their business models directed from numerous influences that are projected to ultimately turn the industry around. Pressures include providers troubled with the quantity of services they are responsible for, to providers who concentrate on presenting high-cost services that give emphasis to sustaining healthy populations (Dunn & Becker, 2013).