Economics - Paying Providers Of Health Care - Basics

Front 1

Aims for payment systems

Back 1

1) Efficiency (static and dynamic)
2) Equity/Access
3) Cost-effectiveness
4) Quality
5) Robustness

Front 2

What is a P4P system?

Back 2

A system which providers are paid by performance indicators.

Front 3

What is a fee-for-service system?

Back 3

A system in which providers are paid by volume measures

Front 4

Why is a fee-for-services system more dominant?

Back 4

P4P is harder to measure (health is hard to measure), and fee-for-service is more efficient. When there is a high correlation between input and output, FFS is better.

Front 5

What are the complications of a variable payment system (ie FFS)?

Back 5

1) Supplier induced demand
2) Over-provision of services

Front 6

What are some complications of a prospective system (costs not reimbursed, ie DRG)?

Back 6

1) Cream skimming - Over provision of services to low severity patients
2) Skimping - Under-provision of services to high severity patients
3) Dumping - Avoidance of high severity patients
4) Over-provision - Giving too much treatment to patients at lower end

Front 7

Special characteristics of the health care market?

Back 7

1) Asymmetric info - imperfect info
2) Uncertainty - Imperfect information, most important factor influencing physician behavior (Wennburg, 1985)
3) Non-repeat business
4) Non-tradeability of goods - goods and services that cannot be re-sold. They are rival goods.