Health Care Practitioners Compensation Summary

Consequently, it become a financial problem where physician sees no improvement in their revenue/profit, and the cost of treatments continue to rise as reimbursement challenges the physician’s charges. There is always a cost to a better health care and coverage, and vast of it comes from taxation. Hospital and physicians function on funding to keep the door open and operating, and majority of the funding are from taxation. For

costs by the total annual number of inpatient days and outpatient visits to obtain a per episode

Four compensation models are laid out by the Bangor Family Physician case study. These models include: (1) revenue model; (2) net income model; (3) base salary plus

The reimbursement method used at St. Anthony’s hospital is quite distinct depending on the party doing the payments. Payments are received from Medicare, Medicaid, private insurers and also directly from patients. The party responsible for Medicare payment is the Federal government and it offers payment mainly for the elderly. With the Medicare payment, hospitals receive a flat fee depending on the case. According to Gee (2006), most hospital revenue has declined because of the revised payment set by the Diagnosis-Related Groupings. The fee for most cases varies according to the Diagnosis-Related Group (DRG) it can be classified under. For example, Medicare pays only a fixed amount for an elderly patient suffering from pneumonia regardless

Contrary to this, anecdotal reports stated that other clinicians sometimes spend more times in checking and treating patients with severe illnesses or who are in critical conditions, which made the physicians care for a greater number of patients with lower acuity. Whenever a physician and clinician bill for the same service, it is very difficult to tell if the physician saw a more complex patient. Due to these uncertainties in comparing their services, the Commission is reluctant in altering the payment differential. From that discussion, every provider must be familiar with some fundamentals about Medicare. First and foremost, there is Medicare Part A, which actually covers skilled nursing home, hospital, and home health charges; and then there is Medicare Part B, which then envelops most outpatient services, the care that patients in particular obtain from a doctor’s office (Fishman, 2002).

The Inpatient Prospective Payment System is based on CMS (Medicare) standards because it is the largest reimburser. It was created to control rising healthcare costs by determining reimbursement prospectively. The costs of inpatient acute hospitals stays under Medicare Part A are fixed so that each patient case aligns with a Diagnosis Related Group (DRG).

In the first model, the episode of care is the length of time the inpatient stays in the acute care hospital. Medicare pays the hospital a discounted payment based on the payment rates established under the Inpatient Prospective Payment System (IPPS), which starts at zero percent for the first six months and then rises to a minimum of two percent in the third year, based on the IPPS. Physicians are paid under the Medicare Physician Fee Schedule. Hospitals and physicians are to share in any costs. This model benefits Medicare patients by reducing their costs, but not hospitals and physicians because they must share in any expenditures. The second model, which is also based on IPPS, is different from the first model because it includes inpatient and post-acute care from either 30 or 90 days following discharge. This bundled payment includes physicians’

In 1983, the Medicare prospective payment program was implemented which allowed hospitals to be reimbursed a set payment based on the patient’s diagnosis, or Diagnosis Related Groups (DRG), regardless of what treatment was provided or how long the patient was hospitalized (Jacob & Cherry, 2007). To keep the costs below the diagnosis related payment, hospitals had to manage efficiently the treatment provided to a client and reduce the client’s length of stay (Jacob & Cherry, 2007). Case management, or internal case management “within the walls” of the health care facilities was created to streamline costs while maintaining quality care (Jacob & Cherry, 2007).

As a rise for medical services grew, this caused the cost of healthcare to rise. As a result of the rising healthcare costs, the government created a hospital inpatient perspective payment system called the diagnosis related group system. The diagnosis related group system created a fixed and determined payment structure based on the diagnosis of the patient that enabled them to be reimbursed for products and services that were used to treat the given diagnosis with one payment. The diagnosis related group system created an efficient and less costly care for the patient. Outpatient services are not a part of the diagnosis related group

When you have a Medicare Supplement insurance plan, your hospitalization expenses are covered at a higher percentage rate. This makes unexpected hospital expenses

By definition, a MS-DRG is “a system of classifying a Medicare patient’s hospital stay into various groups in order to facilitate payment of services.1” The DRG system was created through Yale University’s Schools of Management and Public Health1. The system organizes potential human disease diagnoses into more than 20 body systems1, and then further organizes the body systems into over 450 subgroups. This organization helps to “classify the care that hospitals provide.1” The way this system works specifies which body system and groups are affected with the amount of hospital resources required to treat each condition. The ending result is a fixed rate for patient services, call

The MS-DRG, is then linked to a fixed payment amount based on the average treatment cost of patients in that group.

CMS as to give more time for the Clinical groups and physicians to be ready for this payment systems it passed few rules to provide further flexibility for the above included groups to let them “pick their pace” and help them avoid penalties. Secondly, CMS shortened the reporting period to

Healthy people who are perceived to heal and recover faster are admitted to hospital to keep the duration of the patient stays down. New patients are admitted with a higher frequency rate.

A principal-agent relationship arises whenever the principal contracts the agent to perform services or supply goods. As set out in the contract, the agent needs to put efforts to produce the output required by the principal, for which the principal pays the agent rewards contingent on particular circumstances occurring. The physician-patient relationship is always modelled within the theory of agency, with consideration of the associated incentive problems. In particular, a physician's is characterized by multiple tasks and multiple principals. Therefore, some dimensions might be difficult to measure and monitor within a classical agency theory. For example, after the physician putting his effort in the first period, it is difficult to measure the amount of effort he will put in the future. Although it might be able to determine whether or not a operation is successful right after the surgery ends and therefore to measure how much effort the physician puts, it is difficult to predict the quality of post-operative care. In this case, the informal payment contributes to ensure physician's follow-up effort.