Healthcare Economics: Reimbursement Models and Trends

Running head: HEALTHCARE ECONOMICS
Healthcare Economics
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Running head: HEALTHCARE ECONOMICS
Introduction
The chief purpose of healthcare reimbursement model is US is to provide the healthcare service
users of USA with high-quality healthcare facility at a reasonable financial cost. In order to keep in
accordance with the specific requirements of the healthcare service users, hospital- and physician-
reimbursement models have changed over time. For instance, earlier the Fee For Service (FFS) model
that involves paying the physician for each service after it has been delivered was followed. However,
considering the fact that this model overtime was encouraging the exploitation of healthcare service users
and creating a conflict of interest, the Vale-Based Reimbursement (VRB) came into being (Delisle, 2013).
Though these model initiatives are taken to provide high-quality care instead of high quantity care. Among
the various VBR models are pay-for-performance (P4P), which rewards physicians for meeting
performance measures related to quality and efficiency.
Discussion
Like the physician reimbursement models, insurance reimbursement models have also changed
over time. For instance, nowadays 100 percent of the insurance risk for the patients is covered under the
mentioned model. The payment s usually collected from the healthcare service user in the form of
monthly per-patient-fee. The fees are actually determined by analyzing the historical costs of the
according to researchers, the historical aspect of hospital reimbursement have highly influenced the
present day reimbursement models and trends in several ways (Porter & Lee, 2013). For instance, the
FFS model along with the healthcare service users who relied on the primary care physician for the
majority of the medical requirements have evolved as well as changed. In the new reimbursement
models, the healthcare service users are not charged for all the services provided by the physician.
Earlier the health management organizations (HMOs) used to follow the volume billing procedure.
Rules and regulations were set by the HMOs in such a way that consumers are compelled to the network
providers which thus the freedoms of choices of the consumers were taken away. However, with the
implementation of new reimbursement models, the earlier policies and procedures are getting reformed
(Quill & Abernethy, 2013). Preferred provider Organizations (PPOs) have emerged and the chief purpose