Health Care Reform Case Study

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One of the cardinal strategies for healthcare reform is to improve the quality healthcare at a lower cost. The high expenditure on healthcare propelled the public, healthcare payers, providers, and other stakeholders to seek innovative payment models which emphasize quality care at a reduced cost. Although the payment reform may seem confusing, it has only one goal and that is for economic incentives to encourage value over volume. These new payment models vary from the traditional fee-for-service model of reimbursement which provides incentives for volume and visit- based care. Each payment model has its incentives and disincentives. Therefore, a good understanding of how they work is imperative especially for healthcare providers including …show more content…
The prospective payment, which is a type of bundled payment system, is one on these new models. It is a method of reimbursement in which payment is made based on a predetermined amount, usually derived by the classification of the system of that service such as the diagnostic-related group. This Medicare makes payment to hospitals based on predetermined payments. Unlike the fee-for-service payment model, therapists providing treatment under the prospective payment system take on financial responsibilities for outcomes. This will cause the therapists to maximize the use resources at their disposal and avoid duplicated treatments since there are no incentives for costly or unnecessary care. Also, coordinated care is encouraged among the team members order to improve efficiency and quality of care, leading to a reduction in the recovery time of patients, and whatever bundle payment is left belongs to the team. At times, it might be difficult to predict the overall cost of an episode of care, in which case the physical therapist is at the risk of undercharging the …show more content…
Classification into groups is done such that patients in each group will require similar health resources for their treatment, making it easier for administrators to predict the cost of treatment. The diagnostic-related group system is clinically coherent such that clinicians can identify a treatment pattern by the patient’s DRG, and adequately prepare adequately before patients’ treatment sessions. Administrative efficiency; improved transparency, and simplified payment processes are achieved when payment is done by
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