Pros And Cons Of Reimbursement In Health Care

In the United States, medical services are not free and they certainly are not cheap, therefore reimbursement for these services is highly important. Today, health care reform is a hot topic with an emphasis on improving patient care and reducing the cost of medical services. Many providers currently use a fee-for-service reimbursement model, which is a quantity over quality method that allows providers to bill for services separately despite whether the quality of care was good or poor. Health care reformers aim to change this with new reimbursement models that highlight value over volume.
Currently, there are multiple reimbursement models that exist which place importance on value instead of volume. The episode-based reimbursement model …show more content…
On the positive side, linking payments and providers and creating one bundled payment, care coordination and communication among multiple providers is boosted. Communication plays a huge role in healthcare and taking steps to improve it is always beneficial. Linking payments to one episode also allows episode-based reimbursement to be flexible in how and where patients receive medical care, and simplifies the billing process since one bill is being generated instead of multiple. Unnecessary and excessive medical services will not be performed because the provider cannot bill separately for each service under this reimbursement model. Episode-based reimbursement also addresses the issue of quality of care because “payments can be developed around clinical guidelines and used to engage clinicians in quality improvement …show more content…
First and foremost, it faces many implementation barriers due to its complexity. If facilities are unable to administer this model easily and without complication, it will be harder for it to become a commonly used reimbursement model. Secondly, if only a few facilities decide to adopt this model, patients will be restricted to fewer providers and possibly lose access to certain services. To combat this, it would be wise to “strongly consider … a staged approach … [that] would allow both providers and payers to gather data and experience and make adjustments for a broader, more ambitious later phase (NIHCR).” The creation of unnecessary episodes can also become a hindrance for episode-based reimbursement. Since providers are not being reimbursed for each service provided, it is possible that providers can create multiple episodes per patient to increase reimbursement just like in fee-for-service reimbursement. Finally, episode-based reimbursement does not offer any incentives to providers for improved performance like other reimbursement models do, making it difficult for providers to want to make the