Fee for Services as a Dominant Payment Process Design for Medical Services - Coursework Example

Fee for Services as a dominant payment process design for medical services Name Institution Course Tutor Date ‘Fee for Services’ as a dominant payment process design in medical services Service provision is a very significant element in the prosperity of the global economy currently. A larger percentage of the US GDP is collected through service provision (Bitner, Ostrom, & Morgan, 2008, p. 68). This is a relatively large industry that employs a larger percentage of the American citizens. Both previous and current studies indicate that services have been rated to dominate global economies compared to the manufacturing and technology departments. Innovation is a key factor when discussing the prosperity of the service industry. Studies indicate the despite the fact that service are more dominant in economic growth compared to manufacturing and technology, it is still less innovative compared to the later two. The service industry is big in the US and it ranges from provision of primary needs to secondary luxury needs. Health care industry providing medical services represents one of the basic needs that Americans need constantly to better their lives. Hospitals are the major components of health care that ensure its provision. In hospitals, there are many processes that are very significant in service provision. This particular discussion highlights one of the major processes in medical service provision in hospitals and sheds more light to the consequences of this particular process in terms of its design and management. Fee for services is the most common payment process design that is used by both private and federal health care facilities in the country. It has been analyzed to favor poor quality of service as practitioners manipulate it to gain more profit (Bohmer, 2009, p. 1). Payment for health care services is one crucial area that has generated heated debates in the country. A number of heath care policies have been enacted in relation to medical services payment in hospitals. All this is geared towards quality provision. The design of this particular process is meant to ensure that people pay for the right services that they get in hospitals. It is therefore important to cover the consequences of the fee for service as a dominant payment process in relation to the quality of health care services provided. The most fundamental underlying principle towards service provision is to create a memorable experience to the customer (Bitner, Ostrom, & Morgan, 2008, p. 68). Most service provision companies and professionals use this factor to create a good relationship with the customers that they serve. The payment system in hospitals in the country has been largely criticized for failing to maintain this good relationship between service providers and those who receive the services. The bone of contention towards this is created from need of payment for quality rather than for quantity. To receive value for their money, patients have to pay for good services provided to them in hospitals rather than being charged for the duration that they have stayed in the hospitals. Health care practitioners in hospitals use loopholes created by this dominant payment process to increase their revenues through increased service provisions and increased charges for their services. This however does not consider quality but rather volume is the term that is used to describe the criteria they use to impose their charges. This particular approach is affecting the healthcare department in terms of innovativeness. Quality provision of medical services is one of the key goals of the health care act in the country. The payment system should therefore be able to emphasize that through provision of quality at low overall medical costs. As physicians crave for more profits by imposing a costly payment system, the value of healthcare is dwindling as a result of this. Major stakeholders have therefore been concerned with the current rate of quality services that are provided by the healthcare industry. Laws and policies have been enacted to work on this matter of quantity against value. The approach of charging more has made the health care industry dwindle in terms of service provision. Most service providers, especially those who provide basic services have been derailed by the need of providing quality against charging high amount for the poor quality of services that they provide (Fleming, Coffman, & Harter, 2005, p. 107). The fee for service system that is currently in use in the country has poor value of health care services as its possible downfall. With attention shifting towards quality rather than the volume which on other occasions cannot be quantified, the payment systems in hospitals and other health provision facilities are being revolutionized (Bohmer, 2009, p. 1). Payment systems such as payment for value seek to address the concern of quality versus volume. This particular system of payment advocates for the payment of the value of services given. Service providers are penalized by this particular system when they fail to deliver quality. Pilot studies of this particular system indicate that mixed results in terms of quality attainment can be registered. Most researchers are not able to agree whether incentives are the key towards provision of quality services in hospitals. Analysis of the mixed results posted from the two payment systems described above indicate that incentives are not the only key towards provision of quality services. The process of payment on its own can be managed to make sure that quality of health care services provided is high. This can be done through the payment system that takes into account the costs involved in certain hospital services which can be minimized while ensuring that quality is achieved through strict regulations. Affordable health care act was enacted with the intention of ensuring that quality is delivered at an affordable and cheaper price. The current design of payment process used for the health care services deals with the volume rather that highlighting the quality of the services provided. It is easy for one to state that US is the most medically developed country. However, this does not take in to account the fact that it is the country that spends highly on its medical care while the quality of the services themselves is questionable (Chua, 2006, p. 1). This therefore puts into spotlight the payment system used by most of the health and medical service providers and practitioners. With the suggestion of more and more sophisticated payment systems, the new designs and approaches towards the general payment systems seek to enhance the quality of services provided in terms of good health care mentainance. However, to ensure that quality is attained by health service providers, a number of professional factors coupled to the payment process design have to be synchronized together. The principle of lean management ensures that quality is attained through the elimination of waste in the production process. This is also supported by the theory of Six Sigma that makes use of capitalizing on wasteful processes to ensure that quality is achieved (George, 2002, p. 19). Despite the consequences imposed by the current design of the payment process that uses fee for service principle, health service practitioners are the key to ensuring that quality services are provided. Incentives as earlier determined, is not a strong factor towards the provision of quality services. The quality of health care can improve while people pay affordable prices. The fee for service process of payment design is a direct indicator that people do not need to pay higher prices to get quality services. The secret towards quality lies within the exploitation of the two principles of lean management and Six Sigma to ensure that service providers stick to the most fundamental units of quality service provision (Koning, Verver, Heuvel, Bisgaard & Does, 2006, p. 5). The management of the payment process using fee for service design has proven to be tricky in ensuring that quality rather that volume is presented to the people. New payment systems proposed and introduced in some states aim to ensure quality health services are provided to patients. Alternative systems that have been proposed and implemented include the bundled payment system where an amount is paid for all the services offered during a defined period of care provision (Mechanic & Altman, 2009, p. 263). The other promising payment methodology tested is known as shared savings. Shared savings work n the principle that when the providers exceed the targets for cost saving while maintaining quality, they are then allowed to share the excess potion of the savings. Pay for performance is also another possible way of ensuring that that cost paid for health care services matches the desired quality. Pay for performance as opposed to fee for services design, works with the guiding principle that that service providers are given incentives based on the quality of services that they give. Specific quality indicators are used to determine whether value is attained or not (Bohmer, 2009, p. 1). These three mechanisms were all suggested as substitutes of the most dominant payment process design that has on most occasions failed to yield quality services. Health service providers use this dominant process to charge high costs for medical services while emphasizing less on the value for money. Conclusion Fee for service is the most dominant payment process used in the payment of medical services in the country. As discussed I the text, it is not the most favorable payment design that related cost to the value of services given. Healthcare providers have been able to manipulate this system to impose high medical costs. As a result, the major consequence of this dominant process design has been a downfall in the quality of services provided. Other working models such as bundled payment work on relating low costs for high quality services. The fee for service payment system should therefore be tailored to replicate the good scenario where value is given priority over volume (Miller, 2009, p. 1420). References Bitner, MJ, Ostrom, AL & Morgan, FN 2008, 'Service blueprinting: A practical technique for service innovation', California management review, vol. 50, no. 3, p. 66-90. Bohmer, RM 2009, Designing care: aligning the nature and management of health care, Harvard Business Press, Boston, MA. Chua, KP 2006, Overview of the US health care system. Retrieved June, 17, 2007. Fleming, JH, Coffman, C & Harter, JK 2005, 'Manage your human sigma', Harvard Business Review, vol. 83, no. 7, p. 106-115. George, M 2002, Combining Six Sigma Quality with Lean Speed, McGraw-Hill: New York. Koning, h, Verver, JP, Heuvel, J, Bisgaard, S & Does, RJ 2006, ‘Lean six sigma in healthcare’, Journal for Healthcare Quality, vol. 28, no. 2, p.4-11. Mechanic, R. E., & Altman, S. H. (2009). Payment reform options: episode payment is a good place to start. Health Affairs, vol. 28, no.2, p. 262-271. Miller, HD 2009, ‘From volume to value: better ways to pay for health care’, Health Affairs, vol. 28, no. 5, p. 1418-1428. Read More