The US struggles with paying for healthcare; the model of payment for services is the major obstacle to improve the delivery of health care (Porter, 2016). There is a battle between the two radically distinct payment methods, bundled and capitation payment (Porter, 2016). According to the authors of this article, capitation brings out considerable risks and does not fundamentally alter the course of the broken system. However, it delivers savings that are modest in the shortest time possible (Porter, 2016). According to Porter (2016), in contrast, bundled model of payment initiates the competition among providers to bring out worth where its materials at the persistent personal level hence directing health care on the correct pathway.
Capitation Model of Payment
The United States requires an alternative payment method to deliver more excellent value to patients (Porter, 2016). Capitation is also known as population-based payment presented in the U. S in the 1990s; however, it was scaled back considerably following widespread criticism (Porter, 2016). Despite capitation achieving unassertive investments quickly, it is not an ideal answer (Gosfield, 2013). It hinders patient competition and choice and fails to essentially change the broken system's direction (Gosfield, 2013). Currently, there are various steps introduced towards capitation. They include joint investments plans, substitute eminence contracts, an accountable care organization (Gosfield, 2013). The organization incurs penalties or bonuses based on in what way the overall fee-for-service alternates intended for all the population's treatment annually compared to historical changes in the ACO model (Gosfield, 2013). The variance among the capitation sum payments and its actual cost in full capitation. Each service delivered by various providers is no longer reimbursed by the insurer under capitation, unlike in the FFS model (Russell, 1996). According to Russell (1996), a single payment is made for every subscriber to a specific single organization.
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The overall cost of population treatment is lowered as a reward to providers by the approach, which is a forward step (Russell, 1996). Under this system, reduction of cost sinks toward the population-level methods, focusing on generic high-cost areas. For instance, lowering readmission, reducing the length of stay, restricting the use of expensive drugs and tests, and patients discharging to their households reasonable than expensive recovery amenities (Miller, 2009). As an improvement to the failed 1990s capitation, capitation methods today incorporate the provider's accountability. But, comprehensive population-level metrics measure "quality," for example, compliance of the procedure, patient satisfaction, and overall outcomes such as readmission rates and complications (Miller, 2009). According to Miller (2009), capitation generates rivalry at the erroneous level and on the bad belongings instead of what is essential to the health care system and patients in general.
No Accountability for Patient-Level Value by Providers
The variants and capitation payment development at the inhabitants level; however, the patients do not care about the population results, for instance, rates of infection; instead, they care nearly the actions they get to address their specific requirements (Miller, 2009). Outcomes essential to heart failure patients are different from those with breast cancer patients (Miller, 2009). According to Porter (2016), the capitated expenditures are not affiliated with efficient or better care for the patient's specific situation. As an alternative, the focus is on off-putting the general care quantity given to providers or individual patients (Porter, 2016). In the service fee, wrong incentives are generated, which compensates for the services' volume but not the value.
Wrong Risks Bared by Providers
Providers in capitation are paid a payment per individual protected, which transfers the danger to the population price actual medicinal wants mix over which providers possess solitary partial switch (Porter, 2016). The private guarantor's errand is capitation for this particular aim without considering the population's actual risk medical needs (Porter, 2016). They cover massive and more varied patient inhabitants, above which the danger can be spread (Porter, 2016). Therefore the only dangers for providers to bear are the genuine maintenance they bring, which they straight affect.
Effects of Fee for Patient on Value for Patients
In the United States, the health care system's famous payment method is fee-for-service compensation (Porter, 2016). This type of payment has hindered improvements in the quality care system and has led to increased prices (Porter, 2016). According to Porter (2016), another problem associated with capitation s that it is hard to adjust to reflect every overall health of the patient risk and adjust the chance for a vast, diverse population.
Bundled Model of Payment
It involves paying for value. Here, the customer makes all payments for services and products for a solitary discount for the entire raft that encounters their requirements (Miller, 2009)—for instance, purchasing a car the brakes and motor from a different supplier they however but the car from a specific entity (Miller, 2009). Bundled payment seems complicated; however, it is an idea since the patients receive all the services for a single price, hence treating the patient-specific medical condition (Miller, 2009). The payment model has been entirely used in organ transplantation and often available for services paid by patents directly, such as plastic surgery, Vitro fertilization, and eye surgery (Porter, 2016). According to Porter (2016), they are five conditions to be met by bundled payment for it maximizes patient value: The Overall Care Needed to Treat a Condition Is Covered by a Single Payment, contingent payment for delivering good outcomes, adjustment of compensation for risk, fair profit for efficient and effective care provided by the amount and no catastrophic case or responsibility for unrelated care for providers.
In my opinion, bundled payment is much better than the capitation model of income since it provides value to the patient. Incorporating all services and paying a single price for the medical condition for patients is effective and efficient. Therefore, the healthcare system should embrace the bundled payment model to improve the patient's services and reduce the cost for the patients. I agree with the authors of this article regarding the best payment model (Porter, 2016). Any organization should look at customer satisfaction needs and not the general outcome of the population, considering various patients require various conditions. According to Porter (2016), for instance, a patient with schizophrenia does not need the same treatment as the patient with diabetes; hence each patient should be given a distinct approach that suits his/her condition to ensure the services rendered are appropriate.
In a nutshell, the article is relevant to the current healthcare strategic financial management environment. Currently, the private sector supports capitation to capitalize on profits. However, organizations that prioritize their patients use the bundled payment model to provide value to patients by paying for treatment of a specific medical condition in a single charge. It is economically effective and efficient to patients without considering the individual patient's outcome instead of the whole population's development. What has changed is that service providers are more focused on the population outcomes, and yet different patients have various needs. They are not putting their patients first. Instead, they are putting profits upfront, which is absurd and against their moral conduct. Therefore it is essential to prioritize patients in the health care system compared to the organization profits hence jeopardizing the patient's well-being.
References
Gosfield, A. G. (2013). Understanding the new payment models. Med Econ , 90 , 44-46. https://www.gosfield.com/images/PDF/MedEc.New%20Payment%20Models_081013.pdf
Miller, H. D. (2009). From volume to value: better ways to pay for health care. Health Affairs , 28 (5), 1418-1428.
https://canceradvocacy.org/wp-content/uploads/2016/06/Miller-Value-to-Volume-H-A-2009.pdf
Porter, M. E., & Kaplan, R. S. (2016). How to pay for health care. Harv Bus Rev , 94 (7-8), 88-98. https://www.yourhomeworksolutions.com/wp- content/uploads/edd/2019/10/how_to_pay_for_healthcare.pdf
Russell, S. (1996). Ability to pay for health care: concepts and evidence. Health policy and planning , 11 (3), 219-237.
https://academic.oup.com/heapol/article-pdf/11/3/219/1665721/11-3-219.pdf
