Question

Define each of the following terms used regularly by the major third-party payers, and explain how they are supposed to affect providers' incentives, fees, and overall utilization:

a. fee-for-service

b. assignment

c. capitation

d. risk sharing

This is for my Healthcare Economics class.

Answer 1

a. Fee-for-service

                 In this providers give payment for each service seperately instead giving toghether for all

                 services.

b. Assignment

                It occurs when one existing provider give their contract responsibilites and benefits to another

                person.

c.Capitation

               In this providers are paid based on number of patient assigned to that particular provider.

d. Risk sharing

              * It is a pratice in health care system in which allows payers to share financial risk associated

                specific patient population with providers.

Effect of above mentioned terms in providers incentives,fee and overall utilization

           * In fee for service providers need to pay for each treatment done by the physician so it result

              in physician may provide more treatments to get more income.

           * Assignments and risk shring help the providers to effectively manage reinbursement services

            in health care.

          * Capitation useful in case of providers because they don't give payment for all services and

              payment only based on number of assigned patients.

          * Fee for service may negatively impact the financial status of providers due high cost of

             health care services.

         *Risk-sharing arrangements help the provider to predict future medical expenses when compared

            to fee for services