Question

Case # 2 in Gapenski Cases in Healthcare Finance addresses a typical case of defining provider payments based on Pay for Performance (P4P) standards. Please read the Case and the solution file included in this weeks handouts. Discuss the methods of P4P included in the case (Productivity, Financial and Quality) in respect to healthcare financial viability for providers as we move deeper and deeper into refining and modifying the healthcare payment mechanisms in the United States. Be sure to discuss how these methods enhance and promote (or don't promote) cost reduction and overall value of health care services. Be sure to address the pros and cons of these types of payment plans. (Please reference the Affordable Care Act, personal experience or other sources pertaining to P4P).

Answer 1

In the healthcare industry, pay for performance (P4P) or value based purchasing is a model of payment which offers financial incentives to physicians, healthcare providers and hospitals for meeting performance measures.

Methods of P4P-

1. Productivity- A practitioners productivity is closely monitored by the results that patients experience. Treatment of major illnesses, lowering of heart attack risks, providing effective feedback, etc are the basis of evaluation of positive performance. Negative performance may include patients returning frequently with the same issues or their condition getting worse.

2. Financial- Reducing the financial costs for the company is seen as a favorable and positive measure of performance. On the other hand, increased operating or financial costs may account as a result of negative performance.

3. Quality- Quality of check-ups, operations and services delivered to patients are a part of positive performance. Lesser complications and side-effects as well as quick recovery by the medicines prescribed and advise given are some of the examples of quality services. In contrast with this, cases of medical errors, improper treatment and negligence during operations may result in poor outcomes.

The above mentioned methods of P4P help in monitoring and delivering highly valued healthcare services. Favorable performance helps in reducing costs for the company while increasing the overall brand value.

Pros of P4P-

1. gives more emphasis to quality of care

2. aims at reducing recurring patient visits

3. promotes public reporting of results

Cons of P4P-

1. no universally acceptable definition of good performance

2. issues of quality and cost that are vital for the overall success of an organization may be overlooked

3. when feedback is slow its value decreases and is not taken seriously

References-

https://sybridmd.com/blogs/general/pros-and-cons-of-pay-for-performance-healthcare-model/