Course 

NR 552 Economics Of Healthcare Policy

Instructions  

Compare and contrast the various methods of payment for hospital services. Which payment model do you feel best meets the criteria of cost efficiency, allocative efficiency, and cost containment? Explain your choice

SOLUTION  

Payment models should be helpful by promoting access to health care, quality health care services, improved equity, efficient and effective resource use, and cost containment (Langenbrunner et al., 2009). Based on these objectives, the approach to payment models can be made in three major ways (Langenbrunner et al., 2009). First, patients can make direct payments. Secondly, they can make direct payment but full or partial reimbursement is made later, and finally, direct payment through a financial intermediary where the patient only makes an informal charge or a copayment (Langenbrunner et al., 2009). From these three approaches, a number of payment methods emerge as discussed in the subsequent paragraphs.

The first payment method is called fee-for-service. In this plan, the healthcare provider receives a reimbursement for every individual service offered (Langenbrunner et al., 2009). The method can either be output based or input based (Langenbrunner et al., 2009). For output based, the provider receives a fixed fee for predefined service irrespective of the costs incurred (Langenbrunner et al., 2009). For input based payment, providers charge patients for all incurred costs in the provision of each service (Langenbrunner et al., 2009). The merits of a fee-for- service method include easy development and implementation and it can improve access to health care in rural areas. ….please click the purchase button below to access the entire solution at $5