Explain the flow of funds within an organization including private pay and third-party reimbursement
Healthcare reforms have been characterized by bids to make access to quality healthcare affordable. Replacement of private payment with third party reimbursement has been one of the methods that have been identified to make the cost of healthcare cheaper. But this has also come with its fair share of challenges such as fraud and inefficiencies.
Delegate your assignment to our experts and they will do the rest.
The flow of funds in an organization involves the net of cash inflows and outflows. A record of these cash transactions is kept in the form of funds flow account statements in terms of financial assets. Funds flow statement, which is prepared monthly or quarterly, helps to report on an organization's net working capital as reflected at the beginning and end of its financial year. Net working capital is obtained from the result of the deduction of current liabilities from the existing assets. The flow of funds within an organization is then traced from the examination of net cash inflows and outflows (Patel et al., 2014).
In healthcare set up, cash outflows comprise the sums of money paid for various goods and services to a hospital. This may include payments to pay for drug supplies and hospital bills such as water and electricity. Cash inflows in a hospital come from private pay payment s and also third-party reimbursement. Private pay is the payment made by patients from their own cash rather than from health insurance coverage. Private pay injects direct money into a hospital as they are paid instantly. Consequently, healthcare providers mostly prefer this model of payment. Third-party reimbursements are made by health insurance organizations or the government to cover for a patient’s hospital bills or costs (Torrey,2019). The payments may cover the whole of the patient's bills or part of depending on the patient’s cover or his or her contributions.
How can you prevent abuses and inefficiencies in third party payments?
Third-party payments are marred by irregular fees and inefficiencies as a result of errors, abuse, or even outright fraud. One of the methods that can be used to prevent abuses and inefficiencies in third party payments is data mining (Byrd, Powell, and Smith, 2013). The technique involves the discovery of information about a subscriber using statistics and automation so that the information is subjected to further assessment. This helps to verify the validity of the claims that a subscriber is making. Insurance companies can then discern whether the payments they are about to make are a falsehood or they are indeed genuine.
A sequential approach of making and verifying claims can help curb resource wastages. This involves the identification of whether the amount of cash being claimed is really exact or exaggerated. This would help eliminate problematic claims, better cost management, and ensure efficiency in offering medical care and third-party reimbursements. Enhanced collaboration between healthcare providers and the payers would reduce the probability of fraud and inefficiencies (Joudaki et al., 2016).
Briefly define the flow of funds in the Care Organization.
Funds flow in Care Organization involves renumeration to ascertain whether the agreed value of a particular transaction has been met. The term funds flow is used in reference to arrangements between partner groups. These arrangements involve a care model that is accountable in terms of cost and quality incentives amongst health institutions and physicians. The provisions also cover the distribution of payments and all items with monetary value. These arrangements and approaches are agreed upon by all parties involved, and they help define the agreements. Funds flow structures cover the problems that may occur in the partner organizations and the likely changes within these organizations.
What challenges do consumers enrolled in private insurance face?
Enactment of the Affordable Care Act in the U.S has posed a challenge to consumers enrolled in private insurance. ACA policies have affected how payers behave (Rosenbaum and Sommers, 2013). The requirement for costly care from providers to ensure commercial exchange for commercial payers results in substantial monetary losses for consumers.
The majority of consumers with private insurance are less knowledgeable about matters pertaining to the insurance covers they purchased. Only a small percentile of policyholders benefits from medical cover on complicated medical issues. This cover is mostly to the elderly and those requiring complex medical treatment. This results in mistrust between the consumers and the private insurers since the health coverage does not meet their expectations.
What methods can you use to empower the consumer?
In order to provide better and quality healthcare, consumer empowerment is one of the areas that need to be addressed by healthcare providers. They need to engage their patients in order to ensure that they offer them their desired care and in doing so, meet their expectations. Some of the methods that healthcare providers can use include:
Improving consumer literacy on matters pertaining to the healthcare sector. Healthcare providers need to inform their consumers about their health and how to maintain it. Healthcare providers can achieve this objective by using digital platforms such as the internet, websites, and blogs. They can also be more innovative and develop applications that help their consumers to track their health conditions such as their blood pressure, blood sugar, etc.
Develop ways of ensuring that patients understand and keep the instructions and advice they obtain from healthcare givers. This is because patients tend to quickly forget these pieces of information and especially the old and sickly people. This goal can be realized by developing applications that are easy to use and comprehend for the caregivers and patients to use in ensuring that they stick to the given advice and instructions.
Helping consumers to understand and respond to questions during medical check-ups and diagnosis. This would help reduce the yes and no answers that are mostly given by patients during doctor sessions. This would result in better diagnosis of patients’ conditions and thus ensure that quality treatment and care is accorded.
Tailoring solutions to consumers' problems to suit the consumers' needs. This should include more consumer involvement in managing their health rather than just dictating instructions to the patients. The solution provided to the consumers should be simple, navigable, readily accessible, and providing actionable and correct information (Hibbard and Greene, 2013).
Healthcare acts target to ensure affordable and quality healthcare for all. As a result, third-party payments have been identified as one of the ways that can help realize this goal. This has come with its own challenges in terms of fraud and inefficiencies in making these payments. However, concrete measures such as data mining and sequential approach can help reduce if not eliminate these challenges. But to ensure the overall success of the healthcare sector, there is a need to empower the consumers. After all, they are at the heart of the health sector. Thus, to ensure the desired outcomes in this sector, their involvement and engagement are crucial.
References
Byrd, J., Powell, P., & Smith, D. (2013). Health care fraud: An introduction to a major cost issue. Journal of Accounting, Ethics, and Public Policy , 14 (3).
Hibbard, J. H., & Greene, J. (2013). What the evidence shows about patient activation: better health outcomes and care experiences; fewer data on costs. Health affairs , 32 (2), 207-214.
Joudaki, H., Rashidian, A., Minaei-Bidgoli, B., Mahmoodi, M., Geraili, B., Nasiri, M., & Arab, M. (2016). Improving fraud and abuse detection in general physician claims: a data mining study. International journal of health policy and management , 5 (3), 165.
Patel, N. J., Deshmukh, A., Pant, S., Singh, V., Patel, N., Arora, S., ... & Parikh, V. (2014). Contemporary trends of hospitalization for atrial fibrillation in the United States, 2000 through 2010: implications for healthcare planning. Circulation , 129 (23), 2371-2379.
Rosenbaum, S., & Sommers, B. D. (2013). Using Medicaid to buy private health insurance—the great new experiment?. New England Journal of Medicine .
Torrey, T. (2019). How Healthcare Providers Are Paid by Reimbursement. Retrieved 10 November 2019, from https://www.verywellhealth.com/reimbursement-2615205
