Who Should Oversee Setting Reimbursement Rates for Medical Procedures?

Who Should Oversee Setting Reimbursement Rates for Medical Procedures?

Introduction

Today, most financing reforms focus on establishing reimbursement methods that help achieve cost containment and efficiency without compromising healthcare quality, as Guinness et al. (2022) reported. These reforms trigger the debate concerning who should oversee the process of setting reimbursement rates between providers and payers. Each party has vested interests that may conflict, affecting their relationships. Although both parties are instrumental in the healthcare sector, this paper defends the position that payers should oversee the setting of reimbursement rates.

Reasons Payers Should Oversee Setting Reimbursement Rates

Quality Improvement

Allowing payers to oversee the process of setting reimbursement rates incentivizes providers to deliver better and high-quality care, improving patient outcomes and creating an efficient healthcare sector. Payers are interested in linking quality metrics to performance standards, as reflected by calls for value-based reimbursement schemes. With the healthcare system’s evolution, payers call upon providers to shift their focus to value services (Axene, 2023). Payers perceive value as the intersection between quality and cost. The significant effect of value-based reimbursement (VBR) is that it inspires healthcare professionals to provide the optimal services at the lowest cost. This model rewards providers for exceeding performance standards and sometimes punishes them for failing to meet the goals (Axene, 2023). Hence, payers ensure reimbursement rates align with care quality.

In an ideal setting, advocating for quality improvement through VBR ensures providers manage patients effectively. It challenges providers to focus on preventive care and wellness while delivering the most effective care options to patients. Although providers encounter numerous challenges like limited resources, demotivation, and lack of information, tying reimbursement to the value generated motivates healthcare professionals to deliver safe and effective care, improving patient outcomes (Axene, 2023). Again, VBR leads to greater cost-effectiveness in healthcare facilities.