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Pay for performance and physicians

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A second major trend described in Ransom is Pay for Performance (P4P) to replace the current system of "fee for service."

Should P4P be directed only or mainly toward physicians? Hospitals? Administrator? Nursing staff?

What are some issues that might come up with Pay for Performance?

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The Pay for Performance (P4P) approach was recently developed under the Affordable Care Act. Although it was originally designed to be quite beneficial to the healthcare field, it has received a lot of criticism. The Center for Medicare and Medicaid Services (CMS) has made it clear that there are plans to do away with fee for service plans and replace it with P4P. It is currently being widely adopted. There have been mixed reactions to this proposal.

Currently, most physicians are paid on a fee for service basis meaning that they are paid based on volume of care. In other words, they are paid for each service they perform. Providers decide on the charge for each patient visit, which puts a lot of money in their pockets. On the other hand, the patients insurance company winds up paying a percentage of the charge. There's a belief that fee for service payments increase healthcare costs and decrease the value ...

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Reimbursement and Pay-for-Performance

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Define pay-for-performance. (Pay for results of service provided)
• Explain how reimbursement is affected by the pay-for- performance approach.
• Discuss how system cost reductions impact the quality and efficiency of health care.
• Discuss how pay-for-performance affects health care providers and their customers.
• Discuss the effects pay-for-performance will have on the future of health care

Pay for performance in healthcare gives financial incentives to clinicians for better health outcomes. Clinical outcomes, such as longer survival, are too difficult to measure, so pay for performance systems usually measure process outcomes, such as measuring blood pressure, lowering blood pressure, or counseling patients to stop smoking.

o Shi, L. & Singh, D. (2012). Delivering health care in America: A system approach. (5th. ed.). Boston, MA: Jones & Bartlett.

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