Finance · June 8, 2021 0

The Concept of Alternative Payment Models in Healthcare

(STL.News) Healthcare is a costly business, with trillions of dollars spent annually to provide millions of people with the treatments and support they need.

With so much money on the line, it is no surprise that the topic of how payments are provided to the companies that actually supply the care itself is being discussed and debated almost perpetually.

Most agree that the current model is not efficient, since healthcare providers are rewarded purely for the volumes of patients they treat and the services they provide, without any attention being paid to whether the end results live up to expectations in terms of quality.

This is where alternative payment models come into play, so here is a look at the most popular options that could eventually become the norm.

The appeal of value-based purchasing

When it comes to alternative payment models for disability services, value-based purchasing is often regarded as the most desirable variety currently in contention.

The concept here is simple enough; the incentive will be shifted from volume to value, meaning that providers will be paid according to the quality of the service they are able to offer patients and to the outcomes that are achieved as a result of their work.

In this case, providers will not simply need to treat as many people as possible to make a profit, but will instead be compelled to make sure that those they do tend to receive an optimal experience, and also actually benefit from the treatment in the long term.

The issue of risk

One thing that is worth noting when discussing alternative payment models with regards to healthcare is that there is a fundamental increase in the financial risk that is placed upon providers in the case of moving towards a value-based approach rather than a fee-for-service setup as we have at the moment.

This is because if quality and outcome are not up to scratch, then providers could miss out on payments for the care they offered patients, even if the reasons for this are not directly due to errors they have made.

Because of this, advocates of value-based purchasing for healthcare argue for a balancing of risk when implementing any changes, in order to encourage providers to make the leap.

The relevance for particular types of care

There is little question that a value-based approach to healthcare payment is better suited to certain types of care than others.

Disability services are perhaps the best example of this because the quality can suffer significantly if the volume of service provision is incentivized.  In many cases, service users require unique and bespoke packages of care, and if they are being treated in a cookie-cutter way then the outcomes may be far from ideal, even if this is not reflected in the payments received by the provider.

Conversely, if disability services are charged according to the value they deliver to service users, this will obviously result in an improvement to the overall quality, while also meaning that better value for money is being extracted from the system without the need for complete structural changes.

The future prospects

Experts and campaigners are confident that alternative payment models will be more widely adopted since in a privatized care context the need to use market forces to improve quality and value is invariably a requirement.

Hopefully, this will lead to a bright future for patients and providers alike, while also sidestepping many of the existing pitfalls in how payments are handled.  Only time will tell, but the initial evidence for this being a good step is compelling.

 

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