Reimbursement and Pay-for-performance paper Essay

Reimbursement and Pay-for-performance paper - Essay Example This information is provided by physicians, medical groups or even hospitals since they are in constant touch with the clients of these health insurance and some of them are also clients. The compensation depending on the agreed terms may be in form of elimination of payments and other non-financial incentives (Greenwald, 2010). Reimbursement works on a fee-for-service initiative where the physicians are paid according to the services they offer and not the quality of those services. Since this is not the original pay for the physician but rather a reimbursement, the number of needed services may not be provided (especially if there is no reimbursement or it is not much). This has in turn led to undersupply of the needed services by the clients when compared to the pay-for-performance approach. The pay-for-performance approach requires evidence of the services offered which should be quality services before any incentive of compensation is made (which may be financial or not). This new approach has overridden the reimbursement approach and is seen to be more client-concerned than the earlier approach. The physicians also have no alternative but to work towards providing the quality services that they were not concerned about earlier. Even though the reimbursement approach is not being faced-away by the pay-for-performance approach, those who are paying are allowed to choose between the two approaches and most are going for the latter considering its advantages over the former approach. This therefore means that the reimbursement approach is slowly but surely failing and becoming out of touch. The new pay-for-performance approach is also seen as a way to correct the distortions incentives that have and are continuing to be made by the reimbursement approach. This is because the reimbursement approach pays physicians double for the services they render which are even not of quality at times. The newer approach is