Value-based purchasing (VBP) is a payment approach that ties reimbursement to the quality of care delivered rather than simply the volume of services provided. Think about how the traditional fee-for-service model works. A provider gets paid for every test, procedure, and visit, regardless of whether the patient got better,...
Last Friday we talked about prospective payment, the model where the payer decides in advance what an episode of care is worth and the hospital gets that amount whether they spend more or less. It was a revolution in 1983 because it broke the link between volume and revenue...
Last Friday we talked about fee for service, the model where every needle, every test, every fifteen minute visit gets billed and paid for separately. It is the oldest payment model in American medicine, and for most of the twentieth century it was the only one that mattered. By...
Over the next several weeks, we’re going to walk through the payment models that drive American healthcare: fee for service, prospective payment, capitated payment, value-based care, bundled payments, and global budgeting. Each one shapes a different piece of the system you live inside every day. Understanding them is understanding...
I was at a dinner party once when someone said, with complete confidence, that the United States doesn’t have government healthcare. Several people nodded. I didn’t know where to start. We have an enormous amount of government healthcare. We have been building it, piece by piece, for sixty years....