Question

Discuss the challenges and benefits of pay for performance under managed care plans.

Answer 1

Managed care plans are a type of health insurance which provides medical care to members at lower cost by having agreement with various medical and health care providers.

Pay for performance is a method of paying incentives to such health care providers on the basis of their performance. When their performance matches with set performance standards they get rewards.

Various benefits of Pay for performance under managed care plans are-

• Quality of service – In Pay for performance model, incentives are only given to those providers who provide good medical care to its members. So, every health care provider tries to provide best services to its members and improve their efficiency to gain financial benefits.
• Guidelines and instructions – Proper clinical guidelines are given that are to be followed by every health care provider. It increases the safety of members as everything will be done as per set guidelines.
• Reduces costs – It helps in reducing the overall costs of insurance policies for the members.

Various challenges faced by for performance under managed care plans are-

• Time consumption – Pay for performance payment model requires lot of time to gather information from various stakeholders and then checking their details. So, insurance companies have to consume lot of time on it and it is the great challenge for them.
• Resources – Lot of resources are required to pay monetary rewards to health care providers. Always having optimal resources is a greater challenge for them.
• Designing the model – A proper detailed model has to be designed keeping in mind all the guidelines to ensure proper quality of care. Designing of model is another big challenge.