Question

Healthcare Financing reference cite needed

Discuss the differences between second-party payment and third-party
payment. What led to the creation of the third-party payment system?

Answer 1

First Party = Health care service provider i.e. Doctor, Hospitals etc.

Second Party = Health care service receiver i.e. we patients

Third Party = neither Doctor nor Patient i.e. someone else may be Insurance company, Government agencies or a NGO.

Second Party Payment

When we visit Doctor, he provide services to us and in consideration we pay them their fee. it is an example of second party payment system.

So we can say that when the patient or service receiver pay the bills , it is Second Party Payment

Third Party Payment

We visit Doctor, he provide services to us but this time we have not paid anything to Doctor, but someone has to pay. here Insurance Company ( in case we purchase a medical insurance) , Government Agency (in case of any government policy) comes into picture and they are going to pay on our behalf.  it is an example of Third Party payment system.

So we can say that when instead of service receiver (or say patient) any Third Party pays the bills, it is Third Party Payment.

What led to the creation of the third-party payment system ?

1. Medical expenses often comes suddenly and its its not possible for everyone to meet them easily. So the Healthcare Insurance comes into picture which allow us to meet this sudden expenses.

2. Many individuals are so deprived that they do not have enough funds to purchase any Medical Insurance. So Government Agencies through their various programmes help such individuals.

3. Their are some diseases which affects society at large so in order to safeguard public at large from such government run vaccination programmes or other similar things for which payment are transferred by Government.