Flow of Finances - Payment Programs of Fee-for-Serviceand Capitatioin

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Flow of Finances - Payment Programs of Fee-for-service and Capitation

Alicia Brooks, NCMA

HCM 520

Current health care reformation has influenced the flow of finances in the U.S. Healthcare system. This paper explores the relationship between financing, insurance, access, payment and expenditures. A comparison and contrast of capitation and fee-for-service are payment methods discussed.

Healthcare Reformation
The Healthcare Reform also known as the Affordable Care Act (ACA) has opened opportunities for individuals to afford healthcare. The ACA includes several areas that influence healthcare services. The first element of the ACA grants consumers better access to clinical and preventive services. Element two gives explanation of cost for preventive services. Although both elements are linked to healthcare providers; one major premise of ACA is that private health plans and insurance policies cover expenses associated with preventive services. New structures for the relationship between financing, insurance, access, payment, and expenditures have evolved as a result of the aforementioned healthcare reformation. The flow of finances in the U.S. health care system

Financing as it relates to healthcare is any method that gives individuals the ability to pay for healthcare services. There are two functions that financing in the U.S. health care system depends on; the purchase of health insurance and payment for services rendered by both public and private healthcare providers (Shi, & Singh, 2009). Although there are various advantages to healthcare insurance, the disadvantage is it desensitizes both consumers and providers to the cost of services provided (Shi, & Singh, 2010). Capitation and fee-for-service are two types of payment programs that are intertwined with how healthcare providers are compensated for services rendered.

Capitation. Capitation is a specific amount paid periodically to health providers for a group...
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