Question

Why did the U.S. transitioned to a prospective payment system (PPS) and how did this change the healthcare system? Also share what you think future payment systems might look like in the United States.

Answer 1

United States transitioned to a prospective payment system (PPS) in order to provide effective, affordable, and efficient healthcare to its people without the over utilization of services.

This significantly changed the healthcare system of United States. It introduced the payments to hospitals based on predetermined prices regardless of the intensity and the duration of the actual healthcare services provided. Due to this, the hospital stays have become shorter and unnecessary diagnostic tests and services has been decreased. This brought cost savings for all payers with resulting reductions in the premiums of health insurance. This also helped in the better coordination of healthcare treatment, payment, and coverage.

The future payment systems would certainly be based on the prospective payment system. The payments will be based on the codes provided on the insurance claim and predetermined prices. The healthcare centers would receive a fixed payment for any visit by a patient regardless of the length and intensity of the healthcare services provided during the visit. The predetermined prices will be specific to the location of the individual healthcare center and will be regularly updated by a financial accounting process conducted by state agencies.