Provider Payment Methods and Incentives

Randall Ellis, Bruno Martins () and Michelle McKinnon Miller ()
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Bruno Martins: Boston University
Michelle McKinnon Miller: Loyola Marymount University

No wp2015-023, Boston University - Department of Economics - Working Papers Series from Boston University - Department of Economics

Abstract: Diverse provider payment systems create incentives that affect the quantity and quality of health care services provided. Payments can be based on provider characteristics, which tend to minimize incentives for quality and quantity. Or payments can be based on quantities of services provided and patient characteristics, which provide stronger incentives for quality and quantity. Payments methods using both broader bundles of services and larger numbers of payment categories are growing in prevalence. The recent innovation of performance-based payment attempts to target payments on key patient attributes so as to improve incentives, better manage patients, and control costs.

Keywords: Provider payment; fees schedules; Diagnosis Related Groups (DRG); moral hazard; selection; capitation; incentives; risk adjustment (search for similar items in EconPapers)
Pages: 27
Date: 2015-08-12
New Economics Papers: this item is included in nep-ban, nep-hea and nep-pay
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Citations: View citations in EconPapers (1)

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