Payment and Pricing in Health Care Essay

Introduction

One of the most discussed areas of the health care industry is the payment and pricing systems that it utilizes. Their complexity often becomes a serious issue for patients, health care providers, and the government. However, these systems are extremely difficult to change due to their reliance on government legislation. The complex nature of these systems requires closer examination to reveal the reasons for the complications. This paper will provide an overview of the differences in charging and pricing in healthcare in comparison to other industries, the impact that private and government insurers have on reimbursement, and which form of payment has the most merit.Payment and Pricing in Health Care Essay

Differences in Charging and Pricing From Other Industries

The practices of charging and pricing in health care cannot be compared to any other industry. The process of charging in a standard industry is simple. A customer pays for the services or products, and the business receives what they charge. On the other hand, health care businesses have to rely on a third party to get reimbursed for the services and products they provide. Insurance plays a large role in this process. Patients that have commercial insurance are charged by the payment rates stated in their contracts. The contracts themselves are negotiated between the insurance company and health care provider, which often results in varied payment rates between patients. Besides, patients have to be qualified to receive insurance coverage to gain it in the first place. The government is considered one of the main purchasers of health care services, and it does not negotiate the rates, but instead uses a variety of mathematical formulas, which may differ between states, to calculate the rates that would be most appropriate. A major problem in this system is the complexity of billing. Payment and Pricing in Health Care Essay. Every single procedure, medication, or treatment has to be accurately documented to ensure that the insurance company, or the patient, pays for all the services provided by the hospital. Anything missing from the medical record, but still provided to the patient, would not be reimbursed to the hospital (Cleverley & Cleverley, 2017).