Value-based payment reform - Design of a theoretically optimal value-based payment model
8 important questions on Value-based payment reform - Design of a theoretically optimal value-based payment model
What is the small variable payment?
What is the substantial global base payment?
* = Population-based payment = payment per person
What does a single payment to a multidisciplinary provider group do? (4x)
- Stimulate well-coordinated care
- the multidisciplinary provider group is accountable for spending and quality.
- large multispecialty groups of providers
- different types of physicians, allied healthcare professionals, and facilities
- Main contractor receives payment
- Central role of primary care physician (PCP)
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What does a comprehensive care package do for a defined population?
- It stimulates integrated care and prevention
- ideally the whole spectrum of care is included in the bundle
- prevention is cheeper than curing
- The payment covers the full continuum of primary and secondary services
- attribution of population based on region, prior utilization of affliation with a provider group or practice
- minimum population size.
What does fixed payment stimulate?
- financial result (saving / losses) = payment - spending
- fixed payment per person results in more financial risk
setting the payment:
- historical spending
- relative cost benchmarks market or peers
multiyear contracts
Why does the risk profile get adjusted for the target population?
- account for systematic cost variation
- three purposes of risk-adjustment
- prevents cherry picking and lemon dropping
- fairness in payment allocation
- providers focusing fully on optimizing value
Why are there risk-mitigating measures for providers?
- fixed, prospective system: providers bear full risk
- Despite sophisticated risk adjustment substantial underpayments for high-cost cases
- Majority of healthcare spending is random
- Incentives for perverse provider behaviour
- Protect providers against excessive financial risk: risk sharing
What options are there for risk-mitigating measures?
o Risk-sharing rates
o Reinsurance provisions
o Carve-outs
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