Pay for Performance in Healthcare

Pay for Performance in Healthcare

Executive Summary

There is an urgent need to reform patterns of reimbursement of health care, including medical compensation to treat the current high costs of health care despite the many initiatives for quality. Pay for performance is a model that attempts to align economic incentives with better results and values, rather than the current system of rewarding the volume and intensity of care provided. The Pay for performance has been implemented in other countries besides USA and is probably most advanced in the UK. The measurement of the Pay for performance and the types of incentives are evolving and now none of them is perfect. Pay for performance is a system for which all stakeholders in health care should work. The quality of health care today is a vital national concern, and structural changes in health care have evolved rapidly in response to increased financial pressures and demands of quality assurance. United States spends more on healthcare than any other country in the world, about 2.300 billion USD annually. This amount represents 16.7% of gross domestic product (GDP) and is expected to grow to 20% of GDP in 2015. United States can provide its citizens a first class health care for less money. Each year, up to 700,000 million USD is spent in the U.S. in providing health care services that improve health outcomes. With healthcare costs spiraling out of control increase despite the suboptimal quality of care, it is imperative that all stakeholders involved in health care (doctors, patients, payers and purchasers of services) to collaborate in exploring new models of healthcare delivery and reimbursement systems designed to solve these challenges. This paper reviews the importance of adoption of pay for performance system in order to increase quality of healthcare.

Pay for Performance in Healthcare

Issue Definition

In all modern economies, the health care industry is one of the fastest growing areas of employment. Number of employees is increasing both in absolute and in relative terms. The reasons for this call a few, the growth of "demand for health" to the extent that, as society becomes richer; increase in life expectancy and a gradual aging of the population not only in developed but also in developing countries, the complication of medical technologies that are now demanding not only the work physician, but also to attract engineers, technicians and technologists. It is important to note also that the new medicine highly effective technique, as a rule, not replace, but supplements human labor. Therefore, the technical progress here goes hand in hand with the growth of employment.

Quality of care its availability and timeliness of delivery are increasingly becoming the subject of fair criticism of the society. Lack of effective medical care is usually attributed to low salaries staff. Indeed, the average wage in the industry is far behind the average in the economy. However, wage growth in health care is more rapid, so the relative salary, which amounted in 2000 60% of the average level in 2010 ...