Single Payment System: Bundled Pricing In Healthcare

Pay-for-performance payment model – healthcare payment systems that offer financial rewards to providers who achieve, improve or excel their performance on specified quality of care and cost measures (HealthCare Incentives Improvement Institute, N.D.)

With the growing telemedicine trend there is an increased focus on how to reimburse for these types of patient services, which differ from state to state due to each state 's varying laws, regulations and policies. 2 The current healthcare payment structure in the United States is fee-for-service which makes it imperative for healthcare professionals to use correct codes for proper reimbursements with Medicaid, Medicare and private insurance providers.

Now a statute, the physician/hospital pay for quality, not quantity, public law number: 114-10 signed April 16, 2015 also referenced as H.R.2 —1st Session of 114th Congress (2015-2016), sometimes called the “Permanent Doc Fix” 04/14/2015 : Passed Senate; 03/26/2015 : Passed House (Medicare Access and CHIP Reauthorization Act of 2015, 2015), which defines the payment and reimbursement reform to doctors treating patients with Medicare. This extensive reform includes the CHIP program insuring children and those families that don’t qualify for Medicare but are unable to afford private insurance and is funded by the federal government and individual states.

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)

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

Since 1984, Medicare patients have been serviced under the prospective payment system of the Medicare program. Under this system, primary care providers are reimbursed for their services using a fixed payment for each patient that is determined by the patient’s diagnosis-related group at the time of the admission. Therefore, under the prospective payment system a hospital’s reimbursement is unaffected by the actual expenditures that are required to care for a patient.

Revenue determination is an important tool for health care organizations because it allows for efficient management of payment systems. This paper will look at the different components that form the payment-determination bases of revenue determination. Moreover, the difference between specific and bundled service payments will be discussed. Lastly, the three ways health care providers control their revenue function will be highlighted.

The goal of the initiative is to increase efficiency of care, improve quality of care, and lower costs. This initiative consists of four different bundled payment models. The first three bundled payment models are retrospective payment arrangements based on patients’ historical data. However, the fourth model is proposed for the future. Centers for Medicare & Medicaid Services (CMS) make a single bundled payment to the hospital for all services during inpatient stays for hospitals, physicians, and other medical professional specialists.

Single payer reimbursement is a health care financing system that “includes both the collection of money for health care and reimbursement of providers for health care costs.” In such a system, the government or a quasi public agency is the entity that bears full responsibility of collecting funds and reimbursing appropriate parties, but the provision of care remains in private hands. Through taxpayer funds, the government collects money from individuals and businesses, and then reimburses providers who delivered health care services to those individuals enrolled in the public health insurance program. (http://www.pnhp.org/facts/what-is-single-payer).

Single-payer health care would also improve the ease with which people receive competent health care. A single-payer health care system with a streamlined means of receiving and paying for medical care would save valuable time and money as compared to our current health care system, which is bogged down in a morass of complex and varying insurance forms by indifferent insurance companies. The complexity could lead one to think the insurance companies would be more than happy to simply not make payments after their customers have received the required care. The administrative cost of dealing with so many varied insurance companies alone is exorbitant, “$82,975 per physician per year spent in the United States”(Morra et al. n. pag). Nearly

One of the main reasons the single payer model has not been adopted by the U.S. is due to the political obstruction that stands in the way of change. For example, Representative John Conyers every year since 2002 has introduced an act for a single-payer system but neither his bill nor any others succeeded in getting more than 20 percent congressional co-sponsorship (http://www.huffingtonpost.com/entry/its-time-for-a-single-payer-healthcare-system_us_58d6470de4b0f633072b37f8). Such a low percentage demonstrates the stationary political climate associated with health care system reform in the U.S. Additionally, implementing a single payer system would monumentally increase government spending. Although, it has been found that, on a per capita basis the U.S. government health programs alone spend more than Canada, Australia, France and Britain each do on their entire health systems

Healthcare systems generally involve three components: the patient, the payer, and the provider (Cline, L. 2018). A single payer healthcare system is a system with one entity that collects funds and pays for health care on behalf on an entire population. The model for these systems involves four main functions: collection of funds,

In addition, this multi-payer system allows health care prices be set though the private marketplace of the country driving high costs for everyone. This health care system is the only one in the world that gives the freedom of setting their fees and prices, as they see convenient, to the large number of independent providers of health care services and marketers of pharmaceutical and medical supplies that exists. By doing so, the system has become unaffordable for the uninsured because of its excessive costs, and health insurance companies have been forced to accept whatever prices they set since they need to have them included in their networks.

It is a patchwork of loosely connected financing mechanisms varying in terms of sponsorship and provider type. It also reflects the age, health and economic status of the specific patient groups that are being served. Considering the growing number of Americans who are uninsured for health care and the low ranking of the United States among a variety of health indicators, one may say that it is a disappointing financing system. These observations provide a basis for supporting our position for a national health care system. Where possible, comparisons will be drawn between the United States and other countries. Special focus will be paid to similarities in the public and private financing components of the system, reimbursement of various provider categories and trends that we may expect to see in the future.

For a non-profit organization, the Asante Teaching Hospital is able to provide better services to natural birth patients than most of its for-profit competitors and attracts much attention from elsewhere in the world. However, there are some inefficiencies that can potentially harm the hospital’s business and its future. This article is to answer two questions: first, should Asante use bundle pricing for natural births? Second, what is the most appropriate price for natural birth patients?