Healthcare uses different modes of financing among them individual insurance, out-of-pocket payments, government finances and employment insurance among others ( Castro & Forrestal, 2013) . Although the listed methods were used to pay for healthcare services, they created new challenges such as increasing costs of healthcare among others. Consequently, new reimbursement methods were introduced, with an aim of reducing costs of healthcare ( McWay, 2013) . The three methods of reimbursement discussed in this study are free-for-service, bundled payment and discount from billed charges.
Discount from billed charges method reduces the risk for the provider, and the payer reimburses funds at an agreed discount using the Charge Description Master (CDM). Free-for-service method uses specific bargained rates for each service but other aspects such as overtime and additional care-management elements are also included ( Maurer & Smith, 2013). Bundled payment method reimburses funds to the provider for specific services of care.
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The free-for-service, bundled payment and discount from billed charges will work best for the proposed healthcare facility ( Maurer & Smith, 2013) . The three will cater for both the least aggregated units to the most complex. In addition, they are a combination of simplest and complex payment methods that cater for one care service offered to many types of services offered.
The methods are not without pros and cons. The free-for-service is beneficial as it is based on individual elements of health care. However, its con is evident as it is not keen on offering quality services ( McWay, 2013) . The bundled payment has an advantage as it encourages greater coordination of services offered. It prevents redundancy of unneeded services. The major con of bundled payment is that, it can cause strain on providers in the event they are not used to work together ( McWay, 2013) . Discount from billed charges is easier to calculate as it tracks each service offered. However, it is disadvantageous in the sense that, it cab lead to higher denial rates, thus calling for auditing.
The three methods will impact financial operations on numerous ways. Firstly, bundled payment will pose a challenge of distributing funds across different providers. Free-for-service is good for financial operations as it allows accountability ( McWay, 2013) . Discount from billed charges method impacts financial operations in the sense that, in most cases, the billed charges are rarely equal to the amount reflected on the charge-master (Ikegani, 2014).
References
Castro, A. B. & Forrestal, E. (2013). Principles of Healthcare Reimbursement. 4 th Ed. New York, NY: American Health Information Management Association
Ikegani, N. (2014). Universal Health Coverage for Inclusive and Sustainable Development: Lessons from Japan. Washington, DC: World Bank Publications
Maurer, F. & Smith, C. (2013). Community/Public Health Nursing Practice: Health for Families and Populations. New York, NY: Elsevier Health Sciences
McWay, D. C. (2013). Today's Health Information Management: An Integrated Approach 2 nd Ed. New York, NY: Cengage Learning
