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American Healthcare Services Payment Differences Coursework

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Updated: Jul 17th, 2020

Medicare Payment Methods for Outpatient and Physician Services: Differences

Two basic differences that Medicare can be distinguished by among the previous insurance programs, the payment methods for outpatient and physician services deserve being considered closer. According to the definitions provided, the key methods used in Medicare for outpatient services used to be on hospital’s costs, as Outpatient hospital services payment system (2007) explains. However, with Medicare, the outpatient services payment strategy was shifted towards setting payment for individual services (Guterman, Davis, Stremikis & Drake, 2010), which presupposes that hospitals receive outlier adjustments for extraordinary cases as additional payments.

Physician services, on the other hand, were intended to be based on the principle of reimbursement, according to the Medicare system (Scarrow, 2002). The given payment principle is much more flexible than the previous one, seeing how it splits the finances for the healthcare services into two basic categories (Lesser, Fineberg & Cassel, 2010), i.e., the hospital insurance and the medical insurance (Hospital outpatient prospective payment system, 2012). While the former is financed by payroll taxes, the funds for the latter are supplied from the monthly premiums for the most (25%) part.

Defining the key difference between the two aforementioned principles of payment, one must specify the fact that the source of the payment is different in each case. While the outpatient services are based on the use of hospital costs, the physician services payment is carried out by withdrawing funds from payroll taxes (Wilensky, 2009). The amount of payment for each of the types of services, therefore, is also different.

Bundled Payments and Global Payments: Difference

Among the key innovations that the Obamacare reform offers the U.S. citizens, the concepts of bundled payments and global payments should be listed. According to the existing definition, a bundled payment is the type of payment that is traditionally given to the provider of healthcare services to facilitate multiple healthcare services to the people with a particular health issue. Doctors, in their turn, choose the means to use the funds supplied for the needs of the patients. Also known as condition-related services, they are traditionally used for specific episodes of treatment, i.e., the cases that have a beginning and an ending; however, according to the rules of the Obamacare reform, the given payment system also includes payment for managing chronic conditions and their exacerbations (Affordable Care Act: How Obama’s signature legislation could be changed, 2013, November 20).

Global payments, in their turn, are traditionally defined as a series of fixed payments that are provided for a fixed amount of time, yet are not supposed to be used for addressing a particular disease and can be utilized for the needs of any patient. In the given case, it is not the amount of time that serves as the defining feature of the initiative, but the severity of the patient’s disease (Humer, 2013, November 11).

When it comes to comparing the two types of payment, one must mention that the bundled payment presupposes that every episode of the patient’s treatment must be paid separately, while in global payment system, the total case is covered, disregarding the number of times that the patient had to visit his or her doctor, or the number of treatment interventions that had to be undertaken.

Patient Reform Initiatives in the Patient Protection and Affordable Care Act

The Patient Protection and Affordable Care Act, also known as Obamacare, presupposes that the healthcare provider should be enhanced by increasing the number of uninsured citizens. There are largely three key changes that the given reform has made in U.S. healthcare. To start with, Obamacare presupposes that bundled payments initiative should be introduced into the healthcare system, as several sources explain (Gottlieb, 2012, December 22; Jaspen, 2013, January 2). The concept of the bundled payment, in its turn, includes supplying doctors with money that are supposed to be used for treating severe conditions, such as cancer, heart diseases, etc. While the given initiative does allow for more opportunities in terms of the choice of treatment, it still makes a patient more dependable on the doctor.

The second initiative that should be singled out of the ACA is the so-called Pay for Performance, which can be described as an attempt to introduce the principle of reimbursement into the healthcare system (Nox, 2013, November 20). While driving with good intentions, the given change to the healthcare system presupposes that specific standards for different kinds of healthcare services should be introduced. Finally, the initiative known as the elimination of co-payments should be listed among the most significant changes made to the U.S. healthcare service system (Becker, 2013, August 7). The given initiative will supposedly increase liability rates among the patients using the co-payment system. However, the given system may be considered limiting for several patients, who use the support of sponsors. Therefore, while having a few upsides to it, the Obamacare system requires better scrutiny and, perhaps, several amendments.

Reference List

(2013). The Wall Street Journal. Web.

Becker, A. L. (2013). The CT Mirror. Web.

Gottlieb, S. (2012). The problem with Obamacare’s bundled payments initiative. AEIdeas. Web.

Guterman, S., Davis, K., Stremikis, K., & Drake, H. (2010). Innovation in Medicare and Medicaid will be central to health reform’s success. Health Affairs, 29(6), 1188-93. Web.

(2012). Web.

Humer, C. (2013). . Reuters. Web.

Jaspen, B. (2013). Forbes. Web.

Lesser, C., Fineberg, H., & Cassel, C. (2010). Physician payment reform: Principles that should shape it. Health Affairs, 29(5), 948-952. Retrieved from ProQuest.

Nox, K. (2013). The Healthcare Foundation of America. Web.

Outpatient hospital services payment system (2007). Web.

Scarrow, A. M. (2002). . Neurosurgical Focus 12(4), 1–3. Web.

Wilensky, G. (2009). Reforming Medicare’s physician payment system. New England Journal of Medicine, 360(7), 653-655. Web.

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