These doctors’ are reimbursements in units, meaning the prices are predetermined for each unit of output. For example, fee per exam, fee per x-ray, fee per diagnosis, and so forth. The fee-for-service cost-based payments whereby the insurers’ agree to compensate the provider is volume and quantity driven. The insurance company, in this case, creates the relationship between price and volume, according to an economic argument (Hicks, 2014). Apparently, the FFS reimbursement system proves the absence of control. The FFS payment method is not reasonably sustainable.
What are the pros and cons of capitation and fee-for-service methodology?
Essentially, the capitation systems were less popular because the providers assumed more risk, whereas the FFE system the insurer assumed more of the risk. Indeed, both payment systems need corrections that while the capitated system maintain slow growth in health care cost, but incentivize providers to shrink patient volume. Shockingly, the FFE system supports providers to increase additional medical events because it determined the sum of remuneration. The one system that could likely help to lower health care spending is the capitation method; however, adjustmens are needed to ensure quality patient …show more content…
That is, patient health information assimilated, analyzed, and programmed to identify what determines the price, quantity, and expenditures on health care. Closely linked is health insurance; thus, HIS technology tracks, and monitors utilization activity, and records insurance data, plus captures claim discrepancies according to reimbursement transactions between health care organizations and the insurer. Furthermore, the ACA contained initiatives, which have been instrumental in developing strategies, such as, the Accountable Care Organization (ACO) with measures to move the public health care insurance for seniors, i.e. Medicare from the fee-for-service systems to a somewhat similar capitation care model. Before the comparison, it is important to identify changes that affect the recipient of Medicare