Patients and families increasingly depend on insurance to cater for their healthcare costs. Therefore, the systems that insurers use to pay providers will have a significant effect on the value and effectiveness of interventions. While these methods are varied, they face some common challenges and have had significant achievements. Two major challenges facing Prospective Payment Systems (PPS) include the lack of a comprehensive classification method and poor distribution of resources. However, the mechanisms have been successful in controlling the costs of hospital services and promoting value-based care.
The first challenge facing PPS is the lack of a comprehensive system for classifying patients. Clients suffer from diverse diseases and conditions, making it hard to develop a blanket and inclusive diagnosis-related group (DRG) categories. Thus, it is common for DRGs to group patients whose situations require different resources allocations. Such mistakes reduce the effectiveness of PPS. The second challenge facing PPS is the unequal distribution of resources. There have been concerns that most PPS increase payments to urban facilities while reducing the amount of money that rural hospitals receive. Significant issues that promote inequality in rural areas include poverty and cultural barriers (Raykar et al., 2016). By using separate rates for rural and urban facilities, payments have further encouraged disproportional resource distribution.
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The first prosperous area of PPS is in reducing the cost of hospital services. The mechanism reduced the unnecessary utilization of hospital and specialist services. It also encouraged the review of cases at individual levels. Secondly, PPS has been successful in promoting value-based care through public reporting and consumer protection strategies. Research defines value as the achievement of best outcomes at minimum costs (Conrad, 2015). Thus, care facilities have a responsibility to ensure quality and appropriate care.
Indeed, payment systems have had a great influence on healthcare insurance. Despite facing significant barriers, they have achieved some great milestones. The major challenges that PPS face include the lack of a comprehensive classification and unequal resources distribution. However, it has been able to promote value-based care and reduce healthcare costs.
References
Conrad, D. A. (2015). The Theory of Value‐Based Payment Incentives and Their Application to Health Care. Health Services Research , 50 , 2057-2089.
Raykar, N. P., Yorlets, R. R., Liu, C., Goldman, R., Greenberg, S. L., Kotagal, M., ... & Gillies, R. D. (2016). The How Project: Understanding contextual challenges to global surgical care provision in low-resource settings. BMJ Global Health , 1 (4), e000075.
