third parties, incentives, and risks

First, BlueCross and BlueShield have collectively
provided healthcare coverage for more than 100 million people in all 50 states
including the District of Columbia and Puerto Rico (Gapenski, 2016, p.45).  Second, Self-insurers are considered private
insurers and is beneficial for those in a larger business entity as it is targeted
in improving a company’s operating profits by diminishing its claims and
premium costs (“The Advantages of Self-Insurance | SIM”, 2017).  Third, Humana is considered a commercial
insurance plan, requiring the protection of its business interests by avoiding
those most likely to use medical care (Kenen, 2017).  Fourth, Medicare
has more negotiating powers, as Medicare is designed to offer both Part A and
Part B options to patients.  Part A coincides
with funded contributions from all citizens, whereas Part B uses general
revenue and an annual premium (Kenen, 2017). 
Fifth, Medicaid offers health coverage to
millions of Americans, including eligible low-income adults, children, pregnant
women, elderly adults and people with disabilities (“Medicaid |
Medicaid.gov”, 2017).  This is a federal and state funded program providing
an immense of revenue for health providers, specifically for nursing homes and
other providers that treat large numbers of impoverished patients (Gapenski,
2016, p.47).  However, Medicaid overheads
have grown rapidly, forcing policymakers to explore additional ways to advance
the program’s access, quality, and cost (Gapenski, 2016, p.47).  Finally, managed care plans are the combined effort
by an insurer and a group of providers with the purpose of both increasing
quality of care and decreasing cost help (Gapenski, 2016, p. 48).  Both fee-for-service and capitation reimbursements
are housed under managed care plans.  According to Gapenski (2016), fee-for-service is
the payment received for each service that is provided to the patient and capitated reimbursement ensures paying the provider a “fixed amount per
covered life per period regardless of the amount of services provided” (p. 54).
 The downside to capitation is the
encouragement of patient increase within the facility beyond what they can care
for (Kenen, 2017).   

Other provider reimbursements include
cost based, charged based, per procedure and per diagnosis.  Services provided based on the cost are known
as cost-based reimbursements, this type of repayment guarantees
that a provider’s costs will be covered by payment from the payer, for example,
most hospitals are reimbursed by Medicare (Gapenski, 2016, p.52).  A charged based reimbursement is when payers
pay billed charges according to the schedule of charge rates established by the
provider, in which the payer is at the clemency of providers (“The-Third-Party-Payer
System”, 2017).  It is because of
the HMO and PPOs bring large number of patients, they have a bargaining power
in which they can negotiate discounts from billed charges (“The-Third-Party-Payer
System”, 2017).  The per procedure reimbursement
method is established earlier by the third party (Gapenski, 2016, p. 53).  However, according to Health Reimbursement Methods: Their Pros and Cons (2017) this
method can inquire high administrative costs and is used in mostly in
outpatient settings.  Per diagnosis is
also a fee for service reimbursement that pays a fixed amount for each
inpatient day (Gapenski, 2016, p. 53).  Risks
involved with this type of reimbursement “require higher resource utilization
and costlier to treat have higher reimbursement rates” (“The-Third-Party-Payer
System”, 2017). 

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