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Ethical Dilemmas: The Role Of Third-Party Pay In Healthcare

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Ethical Dilemmas: The Role Of Third-Party Pay In Healthcare
1. Second-party payment is when the person (patient) receiving the health service pays their own hospital bills. This was good in that just the right quantity and quality of healthcare was sought after by patients. It was ethically straining for the patients who needed yet couldn’t afford healthcare. Third-party payment is when the agent of the patient contracts with the providers to pay some or all of the bill. Third-party payment systems were created due to bad-debt concerns (created by second-party systems) which led Baylor University Hospital to offer prepaid hospital care to schoolteachers in 1929. Other hospitals duplicated those arrangements, which led to the first Blue Cross plan. After the economic struggles of The Great Depression, …show more content…
Employers preferred managed care organizations (MCOs) because not only do they manage cost, quality, and access to healthcare but they manage increased risk and provide incentives to employers. They contain costs with aggressive methods of controlling utilization and carefully select providers/subscribers. MCOs have changed over the years by the amount of control that they have over physician providers. They have also improved patient quality/satisfaction.

4. Open-panel HMOs allow physicians to see other patients (moderate control over providers) but they are HMOs that contract with physicians to provide care to enrollees in a physicians’ office. They include the IPA and direct-contract model. On the other hand, closed-panel HMOs contracts with or employs physicians who see enrollees on an exclusive basis. No other patients are treated (maximum control over providers) and incentive payments to providers are based on performance. Also, they include the group and staff …show more content…
The different forms of payment to providers include: charges, charges mins a discount, cost, per diem, capitation, and per diagnosis. Charges are prices or rates that patients are charged for a healthcare organization’s services. Charges minus a discount is when a third party (i.e. insurance company) is rewarded with a discount for providing to the healthcare provider, a large volume of patients. These organizations have little financial incentive. Cost involves a healthcare organization receiving not only the cost for care provided to patients of third party payers, but also a small percentage towards developing new services/products. Per diem is a flat fee paid for by third-party payers, for a hospital’s services delivered on any given day. By using this payment system, the healthcare organization has either financial risks (cost of care exceeding the per diem rate) or incentives (if the care costs less than the per diem rate). Per diagnosis is when a third-party payer reimburses a healthcare organization based on a patient’s diagnosis. Lastly, capitation is a fixed amount healthcare organizations receive based on the cost of care projected to be used by the population. Every person using that plan must pay that fixed amount each month, regardless of whether they receive care or
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