Third Party Insurance Case Study

Register to read the introduction… This can be referred to as the insurance companies and the government public programs. By its very nature insurance causes a phenomenon known as “moral hazard”. Unlike most other industries, in health care a third party actually pays for most of the services used instead of directly by the consumer. The consumer’s out-of-pocket costs are therefore lower than the cost of the services. This shields them from the knowledge what the prices are, and increases usage of the services, thus driving up price and cost. The moral hazard of increasing usage is induced by providers and consumers alike. When hospitals know the patient is covered by insurance or public program, they will more likely utilize tests and procedures more. Similarly, patients more easily request procedures and tests when they are covered by insurance and/or public program. Capitation, prospective-payment plans, and managed care are all methods used to combat this naturally occurring …show more content…
Payment policies must change to motivate providers to deliver value (broadly defined as health benefits per dollar spent) rather than volume (the number of exams, tests, procedure, and treatments).
Apply the best available evidence to eliminate wasteful and inappropriate care. The best prospects for success are likely to come through the leadership of medical specialty societies, which can identify ways to reduce waste without compromising care. These groups could draw from emerging comparative effectiveness reviews and provide guidance that physicians can use to determine which procedures are necessary, appropriate, equivocal, or inappropriate in various situations.
Enhance patient safety. Medical errors cause needless complications, injuries, readmissions, and deaths. They also increase providers' liability. Measures to enhance patient safety and improve quality must be tailored to specific patients and settings.
Strengthen primary care. Strengthening primary care could help reorient our health care system from episodic treatment to keeping patients out of the hospital, thereby lowering costs and improving care.
2. Engaging and Empowering