Essay about Healthcare Payment Types

3265 WordsAug 25, 200914 Pages
Healthcare Reimbursement Models…. Is There a Better Way? Physician Perspective Executive Summary The traditional methods of paying for healthcare services use to involve paying for services out of pocket. The gradual transition from fee- for- service payment to managed healthcare is not a recent phenomenon. With the increasing costs of healthcare services, there was an increased interest in moving payment from fee-for-service into a more organized payment structure. This paper discusses the three payment types in the healthcare industry used by practicing physicians: fee for service, bundled service arrangements, and capitation arrangement. It also addresses the best current method as well as future reimbursement methods. The…show more content…
Government programs to cover healthcare costs began to expand during the 1950s and 1960s. Disability benefits were included in social security coverage for the first time in 1954 (Carroll 2007). When the government created Medicare and Medicaid programs in 1965, private sources still paid 75 percent of all of the healthcare costs. By 1995, individuals and companies only paid for about half of the healthcare with the government responsible for the other half (“Key Milestones”). Reimbursement is the healthcare term that refers to the compensation or repayment for healthcare services. It is basically being paid for a product or service that has been provided. In most cases, an individual will pay for their product and then receive the product, but in healthcare it is different. Patients will be treated, but they do not have to pay before they leave the hospital. Instead, it is up to the hospital, physicians, and clinics to seek to be paid back for services they have already rendered. They often seek this reimbursement from what is called “third party payers” which includes the patient or responsible party, the provider (physician or treating facility), and the insurance company or health agency that pays the physician/clinic. The ebb and flow in the healthcare industry regarding payment systems and arrangements for practicing physicians has been especially pronounced in the last twenty years. With the constant rise in
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