Opinion on this Answer?

What is Pay for Performance? Do you think that P4P will improve health care in the U.S.? Do you think P4P will reduce health care costs in the U.S.? Why? There has been controversy about treating health care as a "business, but do you think business principles are beneficial in the health care industry? Why?

What is Pay for Performance?

In health care, pay for performance (P4P) is also known as value-based purchasing. According to Scott Hodgin (2018), value-based purchasing is a methodology of healthcare payment reform that focuses on paying providers for quality and value, not just volume. Providers are reimbursed based on the quality of their service and cost efficiency.

Do you think that P4P will improve health care in the U.S.?

According to an article written by Werner, Konetzka, & Polsky (2013), P4P is typically used to improve health care quality but evidence that supports its use especially in large scale settings is mixed. Werner et. al find that quality improvement under P4P was inconsistent. Quality in nursing homes did not improved under Medicaid-based P4P. There is very small evidence that the use of P4P improves quality of care.

According to Jason Shafrin (2008), one would think that paying doctors to perform certain tasks that are required medically will result in improved quality but P4P may not work as anticipated. In addition, Shafrin (2008) finds that only a fraction of physicians income come from P4P. This may be one reason why P4P does not really result in better medical care.

Do you think P4P will reduce health care costs in the U.S.? Why?

According to Kelly Montgomery (2020), P4P is supposed to reward providers for their efficiency. This means providing higher quality for a lower cost. Instead of the current system in which providers are paid based on each service performed, P4P is supposed to maximize the impact of preventive care and help contain rising costs of health care. If care being provided has been proven to improve outcomes and waste is minimized whenever possible, the use of P4P should reduce health care costs.

There has been controversy about treating health care as a "business, but do you think business principles are beneficial in the health care industry? Why?

According to an article written for Reference (n.d.), businesses have a primary purpose which is to make money. Businesses sell products or provide services in order to make money. An article written by Lyve Alexis Pleshette (2013) says that every business conforms to the three basic parts of moneymaking cash generation, return on assets (combination of margin and velocity), and growth. These business principles seem to be difficult to apply in health care. Health care is not something that you can just pull off a store shelf and pay for it at the cash register. In health care, you cannot be guaranteed good results. Business related principles that may be applied to health care involve understanding and efficient allocation of resources to meet demands. Applying economic principles to understand resource use may be challenging though due to the complexities of delivering health care especially in a hospital (Scott, Solomon & McGowan, 2001).