Methods of Cost Controls in Health Care Reimbursement, Essay Example

The cost of health care is a critical issue that can not escape the attention of patients, healthcare providers and the government. Health care costs have in the recent times soared to alarming levels rising wild spread concerns. Certainly, the role played by costs in determining who can access Medicare can not be overlooked. As a result, various methods are employed to help control costs in different reimbursement models.

Oberlander and White in their article published in the New England Journal of medicine discussed host methods that can be used to control the cost of health care. The methods they present include all-payer regulation cost controls, prevention, disease management, comparative-effective research, and health information technology. Oberlander and White further keenly examine various incentives that make an all- payer regulation methods suitable for the control of medical care reimbursements.

According to Oberlander and White all-payer regulation cost controls present four positives impacts on health care.  First, this method creates a fairer reimbursement system and remarkably reduces access constraints which are a product of price discrimination thus subsequently narrowing what different insurers disburse for health care. Second, the method significantly reduces the health care costs resulting in reduced spending on health care. The third incentive of this method is the setting of standardized regulation which results in a reduction in confusion and expenses incurred as well as simplification of the bailing process (Oberlander and White). Finally, an all-payer regulation system facilitates the coexistence of private insurers’ plans and public insurance plans. As Oberlander and White asserts, this cost control method can ease the apprehension on the ability of the public plan to utilize its purchasing ability to provide cheap coverage and consequently phase out  private insurers since all insurers are subjected to same rates.

In a separate article, “Effects of Bundled payment policy options ,” the incentives and consequences of a bundled payment system as a method of controls costs is critically examined and analyzed. Bundled payments also provide a viable alterative to minimization of the amount of money spent on health care (Rand Compare). The bundled payments method involves bundling of certain medical service in a unit that is paid for as a single package. The main reason for the development of this method is to encourage hospitals to avail well coordinated services and reduce expenses insured by health care servicing consumers due to preventable readmissions. As such bundled payments help to minimize that amount paid by the patients (Rand Compare).

Bundled payments however may have negative effects to hospitals or health care providers. If the cost charged for the services provided is greater than the sum which would be charges for each service provided the providers stand to benefit greatly (Rand Compare). However, if the bundle paid is less than what would be paid if each service was charged individually, the hospital bears the extra cost.

The bundle payment method is meant to reduce the amount of money spent on health care through various techniques. First, the method aims at reducing the quantity of superfluous services rendered by physicians to patients who are hospitalized. Second is to encourage and ensure judicious use of medical care resources while taking care of patients who have been hospitalized and the subsequent discharge costs.  Also, such a method will certainly ensure that the cost incurred by patients who are readmitted to hospital with the same case of sickness within a specific period after the previous admission.

Certainly, cost control mechanisms are meant to protect health care consumers from exploitation by medical care service provider at the same time ensure that heath care providers are able to provide affordable services sustainably. The success of such measure is heavily dependent on the various players within the health care industry.

Works Cited

Oberlander, Jonathan and White, Joseph. “System wide Cost Control-the Missing Link in Health Care Reform” The new England journal of medicine. 2 Sept, 2009. 25 Oct, 2009. <http://healthcarereform.nejm.org/?p=1627&query=TOC>

Effects of Bundled payment policy options. Rand Compare .2009. 25 Oct, 2009. <http://www.randcompare.org/analysis/mechanism/bundled_payment>