Pay for Performance
October 7, 2013
Pay for Performance
Since the early 2000’s, the pay for performance healthcare payment system has become a widespread practice amongst providers and health care facilities. Prior to the use of pay for performance, the common practice was fee for service. Under fee for service, providers and facilities received payment for the volume and complexity of their patients. However, studies had shown that there was a lack of quality and efficiency under this payment model. Therefore, there was a push in the health care industry to find a payment model that rewarded providers and facilities on their quality, not quantity. This paper will define pay for performance, talk about reimbursement and the effects of the pay for performance approach, the cost reductions and the impact of quality and efficiency of health care, the effects on healthcare providers and consumers and the effects pay for performance will have on the future of healthcare.
Pay for performance is a health care payment system in which providers are compensated for meeting pre-established targets for delivery of healthcare services. Implemented by both by the Center for Medicare and Medicaid Services (CMS) and private insurances, pay for performance rewards physicians, hospitals, clinics and other healthcare providers for meeting certain measures of quality and efficiency, (U.S. Department of Health and Human Services, n.d.). For example, providers are paid more when there are fewer errors made. Also, providers are rewarded for making sure their patients meet preventative health care benchmarks such as a primary care physician making sure that his or her patients get their flu shot, physical exams and woman get their annual Pap smears and mammograms. Pay for performance has become popular with The Affordable Care Act plans to implement pay for performance in by experimenting to identify designs and programs...