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7/25/2019 Provider Payment System
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Joko MulyantoDept. of Public Health and Community MedicineFaculty of MedicineJenderal Soedirman University
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Denition of payment system.!b"ective of payment system.
#asic concept of payment system.$ype of payment system.Capitation
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Mechanisms used to %pay& medicalcare providers'or(ani)ations forservices rendered to their clients
Ma"or approaches to payment ofhealth providers*
Direct payment by the patient.Direct payment by the patient+ later
reimbursement by ,rdparty payers.Direct payment by the ,rdparty payers+
patient bearin( no or only limited char(e.
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Set the ri(ht incentives for providersto provide su-cient+ hi(h uality
health services.Containin( the cost.
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Fi/ed and variable system0etrospective and prospective
systemUnit of reimbursement$ype of providers
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Fi/ed systemo 0eimbursement amount does not
chan(e as activities increase ordecrease.
o 1ot remunerated for the production ofe/tra unit.
o 0eceives lump sum+ e/ ante+ notrelated to the production.
o 2/ample* capitation+ salary.
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3ariable systemo 4ncremental income 5 m6re
production of e/tra unit.o May cause over production.o 2/ample * Fee for service
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0etrospective.Provider&s cost reimbursed e/ post.
Prospective.Provider&s payment rates or bud(etsare determined e/ ante.
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Per item7of7servicePer patient7day
Per casePer patientPer period
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PhysicianHospital
Pharmaceutical!thers+ i.e * public health services
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Fee for serviceSalary
CapitationPer diemCase payment8ine item bud(et9lobal bud(et
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FFS payment reimburse provider fordeliverin( specic items such asdoctor consultation+ sur(ical operation.
Divided into three sub(roups*7 !pen7ended fee.7 1e(otiated fee.
7 0e(ulated fee.Commonly used to pay physician
:outpatient care;.
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Supply induced demand.!ver treatment.
2
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Fi/ed amount of money for /edamount of time.
Can be set by ne(otiation.Can be ad"usted by a(e+ specialty+settin(+ responsibilities of doctor.
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Under treatment.=Patient shiftin(>
9ood cost control1eed to monitor performance+uality+ and access.
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!ne payment for one person+ for somebundle of services+ durin( a /edperiod of time+ re(ardless the actualnumber of services provided to eachperson.
Per member per month :PMPM;.
Can be full :t6tal; or partial capitation.Can be /ed or risk7ad"usted.$ransfer the nancial risk from ,rdparty
payers to the providers.
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Under treatCost shiftin(
4ncentive for promotion andpreventionPatient dumpin(Cream skimmin(
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Fi/ed amount for each inpatient dayre(ardless the actual use of service+
dru(s+ and medical products.Use for inpatient care :hospital;.$otal bud(et of hospital in a year$otal number of hospital inpatient
day in a year
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4ncrease len(th of stay and numberof admission.
0educe the intensity of care for eachhospital day.
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4nclusive /ed amount per case:usually per dia(nosis;+ re(ardless of
service and procedures provided.Usually use for inpatient care.2/ample* Dia(nostic 0elated 9roups
:D09&s;.Can be sin(le ?at rate per case+ or
can be risk ad"usted rate.
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0educe unnecessary services andlen(th of stay.
Up7codin( and cost shiftin(Unnecessary readmission.Under treatment+ early dischar(e.
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Provider is paid an amount per (ivenperiod :usually a year; for a dened
responsibility of service provisions.$he total amount is broken do@n intoitems such as salary+ dru(+euipment+ etc.
Usually applied in publicinfrastructure.
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Stron( administrative control 4n?e/ible
4ne-cient
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=one line> item bud(et for facilities for/ed period of time for speciedpopulation or service use.
Usually use for hospital.Soft (lobal bud(et vs. Hard (lobal
bud(et.Calculation based on*
7 4nput7 Historical spendin( and activities7 3olume of service and type of case
:case7mi/;.
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Fle/ibleContainin( cost
0educe access and lo@er ualityA
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$here is no =sin(le7best method>Combined methods is necessary to
(ive the ri(ht incentives for providerin order to provide adeuate andhi(h uality services.
Payment system consideration*
access :euity;+ e-ciency+ anduality.
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B"kmulyanto