Question

Describe how insurance plans can direct utilization of healthcare services? Items to consider are reimbursement methods, cost sharing strategies, contractual arrangements, and benefits.

Answer 1

Insurance plans help individuals to cover themselves from the high cost of health care services. It makes them to utilize the health care services in higher volume. So, insurance plans can increase the utilization rate of the healthcare services. Though, there are different factors or dimensions of the insurance plans that direct the utilization these services.
The first factor is the reimbursement methods. There the insurance plans that come with different types of reimbursement methods. The first prominent method is cashless methods where the patient has nothing to pay to the service provider and it is the insurance company that pays. It is getting most popular and it has increased the utilization rate of the health care services. The another method is reimbursement after the treatment. Here, the patient pays first and then the insurance company reimburses to the patient.
The second factor is the cost sharing strategies. There are provisions of copayments depending upon the type of insurance and critical care. With an increase in copayment by the patients, the utilization rate of health care services may come and vice versa. People with higher copayment on their part may delay the health care treatment.
Contractual arrangements are the third factor that affects the utilization of health care services. These are the arrangements were the insurance companies has tie ups with the health care service providers and patients enrolled with the insurance, will be referred to the health care service provider under the contract. It will also increase the utilization rate as people enrolled, will avail the services.
The benefits offered under the insurance program, will also make people to utilize the health care services. For example, coverage of the preexisting disease, will help the patient to utilize the health care.