BHA FPX 4009 Assessment 1
Reimbursement Models
Healthcare payment systems’ quality patient care goals are primarily to manage the financial incentives as their primary health objective successfully (Erickson et al., 2020). This memo concerns the evolution of payment systems in the healthcare field based on the analyses of transformation processes that have occurred with regard to the FFS model and its shift to value-based models spearheaded by ACOs.
Some people state that factors such as specific characteristics of the two models and comparing the rewards, with reference to value-based and FFS models, are crucial in delivering quality health care. In the same way, the patient case of St. Anthony Medical Center or SAMC of Vila Health has been used to provide actual consequences and results of reimbursement modification.
Traditional Payment Models
Finally, according to this model, the professionals working in the healthcare sector are paid for the rendered services regardless of the readmission frequency. This model had the characteristic of being volume-based, that is, in the number of services since it was necessary to have frequent requests for reimbursement and high payments (Korneta et al., 2021).
On the contrary, there were other models like the capitated payment model, where a certain sum is fixed for the patient and also ensures that the healthcare practitioners manage the expenses efficiently (Fainman & Kucukyazici, 2020). Based on the FFS model, process measurements of the quality that focused on the structure of the working day within a hospital and the adherence to standard medical practices were employed.
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On the contrary, the issue of the FFS payment model was the potential overuse of services; patients tended to demand services more often than they needed them. Likewise, the cost-effectiveness pertaining to prevention care was applied in the monitoring of quality under capitated payment systems.
Thus, in this capitated system, care providers were motivated by incentives that would produce good health, especially with the aim of incurring minimal costs. This model, in comparison to the FFS model, has characteristics that, as a result of management, it targets to control costs and ensure profitability based on illnesses that are acute/chronic, utilizing prevention and early treatment.
Current Trends in Health Care Payment
Payment models offered by ACOs and the value-based payment model that is under discussion are the current trends in the reimbursement models of the healthcare industry in the United States. From the perspective of the value-based model, it is necessary to return the emphasis on the outcomes and quality of work with the population, even if the services increase the volume of work performed daily. The model focuses on improving the results of the client’s attention aimed at achieving the significant quality of offered medical care, which would be, at the same time, relatively inexpensive for the clients and with high levels of patient security.
The significant elements of the model are specified by performance-based care, quality of clinical treatment, safety of patients, and experience of the patient, as noted by Wilson et al. (2020). The reimbursement model of ACOs is also gaining a lot of focus in the contemporary healthcare industry of the United States of America. ACOs promote the idea of offering efficient and invisible care to a particular category of patients with the help of several cooperating members of the healthcare system. As the primary characteristic of ACO’s payment model, most of the responsibilities are shared based on cost and quality outcomes.
Likewise, the model measures quality by evaluating several facets that care providers meet with assistance from the identified measures from ACOs. Rewards given to care providers in value-based and ACO models are correlated with the benchmarks above of patient security, results, and readmission charges. Thus, both of these models, namely the value-based and the ACO models, demonstrate a commitment to the enhancement of healthcare quality accompanied by the determination of the provision of cost-efficient services ( Liao et al., 2020).
How Quality Outcomes Are Rewarded
The drivers of reward and incentives in FFS and capitated reimbursement models are quite different from those of the new models, namely the value-based and ACO models. For instance, the conventional models that were earlier discussed should have paid more attention to the quality and the care outcomes that are observed in the current models.
Capitated and the FFS models stressed the need for preventative treatment as well as the excellent management of illnesses through the cost-ineffectiveness facets. Still, they should have paid more attention to the quality of care, therefore propounding high readmission rates. The following were the major weaknesses of the conventional models of care: Ineffective use of care under each of these models was the primary weak link.
BHA FPX 4009 Assessment 1 Reimbursement Models
Compared to it, modern models (value-based and ACO models) pay much attention to the quality of the results achieved and describe particularly clearly what consequences in the form of penalties or lost remuneration can affect the care provider in the case of high rates of readmission or other factors affecting the safety of patients.
While in the conventional models, the volume of patient care visits and their characteristics determine the amount of reimbursement payment, value-based and ACO models used indicators concerning safety, outcome, and readmission rate of the cared patient to measure the discharge of the sent obligations of the care provider and the amount of compensation to be received. Cost-based and Accountable Care Organization shift came to change the volume-based method of referring from conventional cost-based models (Jayakumar et al., 2023).
For instance, the schematic, such as the value-based model, was associated with enhanced general health by Chen et al. (2020) and patient safety with reduced readmission rates by Bao & Bardhan (2021). The examples from the literature described in this paper bring insights regarding the advantages of modern reimbursements in relation to incentivizing and rewarding high-quality care, as well as low rates of readmission in contrast to the traditional types.
Quality Concerns Affecting Reimbursement
The use of the two consecutive visits within 24 hours by the patient raised an inquiry from the different former focus of Vila Health, as portrayed in the scenario. FFS may have seen SAMC compensate for care in both patient visits because they promote the frequent use of health services (Lindner & Lorenzoni, 2023). Value-based and ACO models focus more on comprehensive and quality-oriented care in order to avoid readmissions (Bao & Bardhan, 2021).
Thus, the current-day reimbursement mechanisms would prove to be disadvantageous for SAMC if it provided substandard care to the first patient contact. According to the modern payment models, the first three aspects that would be envisaged in case of readmission incorporate follow-up care, teaching patients about epileptic seizures, and care coordination.
While traditional structures, such as FFS, would compensate the care providers like SAMC, where these factors are absent, modern reimbursement structures, such as value-based systems, do not. In the provided scenario of SAMC, violation of quality measures concerning patients’ satisfaction and care outcomes, including readmission rates, patient safety, and the usage of Rockwelld-based practice, will have a negative impact on the reimbursement received.
Thus, in the quality of care segment, these issues require covering at SAMC to avoid readmissions and enhance patient safety in order to receive the maximum reimbursement within the frameworks of the new ACO or value-based experimental models.
Conclusion
The primary difference in these models was that quality coupled with care outcomes was different from the focused area as formulated in the conventional models of reimbursement. Considering the reimbursement of the patient’s stay in SAMC facilities from the perspective of traditional and contemporary frameworks, the outlined case scenario has been discussed.
Thus, it can be concluded that, depending on the context of the value-based or ACO model of reimbursement, SAMC of Vila Health might receive a penalty for the low quality of service in the first patient visit in the presented scenario. In contrast, FFS models do not consider it.
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References
Bao, C., & Bardhan, I. R. (2021). Performance of accountable care organizations: Health information technology and quality–efficiency trade-offs. Information Systems Research, 33(2), 399–764.
https://doi.org/10.1287/isre.2021.1080
Chen, H., Cates, T., Taylor, M., & Cates, C. (2020). Improving the US hospital reimbursement: How patient satisfaction in HCAHPS reflects lower readmission. International Journal of Health Care Quality Assurance, 33(4/5), 333–344.
https://doi.org/10.1108/ijhcqa-03-2019-0066
Erickson, S. M., Outland, B., Joy, S., Rockwern, B., Serchen, J., Mire, R. D., & Goldman, J. M. (2020). Envisioning a better U.S. health care system for all: Health care delivery and payment system reforms. Annals of Internal Medicine, 172(2), 20–33.
https://doi.org/10.7326/m19-2407
Fainman, E. Z., & Kucukyazici, B. (2020). Design of financial incentives and payment schemes in healthcare systems: A review. Socio-Economic Planning Sciences, 72.
https://doi.org/10.1016/j.seps.2020.100901
Jayakumar, P., Mills, Z., Triana, B., Moxham, J., Olmstead, T., Wallace, S., Bozic, K., & Koenig, K. (2023). A model for evaluating total costs of care and cost savings of specialty condition-based care for hip and knee osteoarthritis in an integrated practice unit. Value in Health, 26(9), 1363–1371.
https://doi.org/10.1016/j.jval.2023.05.009
Korneta, P., Kludacz-Alessandri, M., & Walczak, R. (2021). The impact of COVID-19 on the performance of primary health care service providers in a capitation payment system: A case study from Poland. International Journal of Environmental Research and Public Health, 18(4).
https://doi.org/10.3390/ijerph18041407
Liao, J. M., Navathe, A. S., & Werner, R. M. (2020). The impact of Medicare’s alternative payment models on the value of care. Annual Review of Public Health, 41(1), 551–565.
https://doi.org/10.1146/annurev-publhealth-040119-094327
Lindner, L., & Lorenzoni, L. (2023). Innovative providers’ payment models for promoting value-based health systems. Documents de Travail de l’OCDE Sur La Santé, 1, 1–44.
Wilson, M., Guta, A., Waddell, K., Lavis, J., Reid, R., & Evans, C. (2020). The impacts of accountable care organizations on patient experience, health outcomes and costs: A rapid review. Journal of Health Services Research & Policy, 25(2), 130–138.