For medical professionals and institutions, the importance of reimbursement in healthcare
For medical professionals and institutions, the importance of reimbursement in healthcare cannot be overstated: this is how they are paid, of course, and how they are able to continue providing services to consumers. But, as folks on both sides of the equation know, healthcare is far from simple, and neither medical decision-making nor healthcare reimbursement rates are simple—they are continually being reformed.
Ideally, healthcare providers would be able to make course-of-treatment decisions for their patients through patient symptoms, diagnosis, open discussions, and insight gleaned from the patient's medical history. In other words, in an ideal world, consideration of how providers will be paid would not hinder physicians from making the soundest medical directives for the patient. However, we do not live in an ideal world, and complications in healthcare reimbursement often interfere with what may be the best course of treatment for particular patients. This is an important consideration for medical professionals, administrators, and lawmakers. However, a new trend is emerging: doctors who don't take health insurance. These providers have opted to take cash payments, set up payments plans, or offer a monthly subscription. A growing number of doctors simply are not taking contracts with insurance companies, although the concentration varies by region and by specialty. That leaves patients to pay the market rate the doctor charges, and then submit a receipt to get reimbursement for out-of-network coverage, if they have it (1).
What are the ethical implications associated with each model? If you were the business office manager of a small practice, which payment model would you prefer and why?
Sample Solution
The passage highlights two prominent healthcare reimbursement models: traditional insurance-based and the emerging cash-based model. Let's explore the ethical implications of each:
Traditional Insurance-Based Model:
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Ethical Concerns:
- Focus on Reimbursement: Physicians might prioritize procedures or tests that are well-reimbursed by insurance companies, potentially influencing treatment decisions and leading to overutilization of certain services.
Full Answer Section
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- Limited Patient Choice: Patients might be restricted to providers within their insurance network, limiting their choice of doctors.
- Administrative Burden: Dealing with insurance companies for approvals and claims can be time-consuming and cumbersome for both providers and patients.
- Ethical Advantages:
- Increased Access: Insurance helps spread the cost of healthcare across a larger pool, making it more accessible to a wider population.
- Reduced Risk for Patients: Insurance protects patients from potentially crippling medical bills.
- Ethical Concerns:
- Financial Barrier: Patients might face difficulty affording care without insurance coverage or substantial upfront costs.
- Transparency Concerns: Cash-based pricing might lack transparency, making it difficult for patients to compare costs and make informed decisions.
- Potential for Underserved Populations: Low-income patients might be further excluded from accessing essential healthcare services.
- Ethical Advantages:
- Physician Autonomy: Doctors have more freedom to make treatment decisions based solely on the patient's needs, without considering insurance limitations.
- Potentially Lower Costs: Cash-based practices might offer lower overall costs by avoiding insurance overhead and administrative burdens.
- Improved Patient-Physician Relationship: The focus might shift to building a stronger relationship between doctor and patient, with less emphasis on navigating insurance complexities.
- Patient Population: If the practice serves a predominantly low-income population, the cash-based model might exclude a significant number of potential patients.
- Practice Specialty: Some specialties, like elective surgeries, might be more adaptable to the cash-based model due to patients' willingness to pay upfront for desired outcomes.
- Local Competition: If there are many insurance-accepting practices in the area, a cash-based model might struggle to attract patients.
- Administrative Efficiency: The potential cost savings from reduced insurance billing complexities could be weighed against the burden of managing patient payment plans in a cash-based system.