The impact of Pay for Performance program - Assignment Example

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This research will begin with the definition of meaning of pay for performance, compensation, benefits and entitlement; challenges associated with pay of performance strategy; measures taken for implementing pay of performance and review on a registered nurse position…
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The impact of Pay for Performance program
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Download file to see previous pages This essay discusses that there have been many different approaches applied before to ensure quality health care service in nursing homes. Two of the most used tools were the reimbursement system and the surveillance and enforcement system. The reimbursement system covered residential care and quality of life via payments to the providers in accordance with the standards set by the federal Nursing Home Reform Law, 1987. And surveillance and enforcement system made sure that these standards were met by the providers and if they are not, then to penalize them through penalties and fines until the deficiencies are corrected. However, for numerous reasons these systems did not prove to be effective enough in improving health care standards and simply too many residents suffered every day. Providers often complained that they were more or less underpaid to do a better job. Under these circumstances, agencies came up with ‘Pay for Performance’ program to ensure better health care facilities by rewarding nurses and physicians according to their performances and improving the overall standard of care they’ve been providing. Pay for Performance (P4P), is a growing program that encourages health care providers to provide better health care facilities by rewarding them on the basis of their performances. The program focuses on three key features namely: participation, achievement and rewards. Participation implies that all the employees of an organization participate and contribute beyond the standard levels. Achievement stresses on reducing costs and at the same time increasing profits. It also focuses on productivity by emphasizing on group rather than individual performances. Whereas rewards are usually in the shape of cash prizes given at regular intervals based on outstanding performances (American Nurse Association, 2006). Compensation is a system of exchange. Participants are given certain targets to achieve and in return are rewarded with either money or valuable assets. Compensation can be either direct or indirect. Direct compensation involves actual money given to workers and consists of base pay, incentive pay, merit pay and deferred pay whereas indirect compensation does not involve any money. Instead it includes protection programs such as health, pension, social security and other insurance services. Benefits on the other hand are the non-financial form of reimbursement offered in addition to cash salary to enrich workers’ living standards. Some of these benefits include health/medical benefits, educational assistance providing tuition reimbursements and cost of books, work/life benefits including life insurance programs, long or short term disability, cancer/critical illness plans, vision and dental coverage and most importantly retirement and pension plan for retirees since a large number of workers approach retirement every year (Report by Center of Health Program Development and Management, University of Maryland, Baltimore County, 2003). Challenges associated with Pay of Performance strategy There are a number of challenges or concerns faced by the Pay for Performance strategy. The first being its potential negative impacts on nursing through its worsening documentation load. Since the program requires a lot of documentation for keeping the record, through which nursing providers are monitored and are awarded based on their performance, more than 30 percent of the allocated time is spent on documentation of their work (American Hospitals Association, 2003; Pg 2004). One also questions the validity of these documentations since according to the analysis of the Centre for Medicare Advocacy, it is typical that providers self report their data in pay for performance programs. This leads to false documentation. Another challenge that comes to mind is that institutions tend to focus entirely on specific points targeted by the schemes rather than broader aspects ...Download file to see next pagesRead More
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