Question

What is meant by financial incentives to provide less care? Would the government or insurers really pay for this type of “limiting treatment?”

Answer 1

Answer:

What is a financial incentive? Definition and examples

A financial incentive is money that a person, company, or organization offers to encourage certain behaviors or actions. Specifically, behaviors or actions that would not otherwise have occurred. The financial incentive, or monetary benefit, motivates certain behaviors or actions.

A financial incentive may be a monetary benefit that a company offers its customers or employees. The term may also refer to incentives to encourage members of the public to cooperate or provide information.

The use of financial incentives to improve quality in health care has become widespread. Yet evidence on the effectiveness of incentives suggests that they have generally had limited impact on the value of care and have not led to better patient outcomes.

What is incentive payment for care?

"Pay-for-performance" is an umbrella term for initiatives aimed at improving the quality, efficiency, and overall value of health care. These arrangements provide financial incentives to hospitals, physicians, and other health care providers to carry out such improvements and achieve optimal outcomes for patients.

Incentive programs include true pay-for-performance initiatives in which payments are tied to defined performance measures, notably the United Kingdom's Quality and Outcomes Framework, introduced in 2004 to improve quality in primary care.

Pay For Performance In Healthcare Programs

While private payers are also experimenting with and deploying pay for performance programs, the Centers for Medicare and Medicaid Services (CMS), spurred by the ACA, is leading the way in value-based care with a variety of payment models including several Pay for Performance systems. As the largest funder of healthcare at almost 40% of overall spending, CMS has developed various Pay for Performance models including three programs that impact hospital reimbursement through Medicare: The Hospital Value-Based Purchasing Program (VBP), the Hospital Readmissions Reduction Program (HRRP), and the Hospital-Acquired Condition (HAC) Reduction Program.