Assignment: A Capitated Price

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Assignment: A Capitated Price

Assignment: A Capitated Price

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Healthcare organizations must also be accredited or certified to qualify for reimbursement from many third-party payers and to qualify for loans from certain lenders. Therefore, the second objective of healthcare financial man- agement is to respond to the myriad of regulations in a timely and cost-effective manner.

fAcIlItAte relAtIonsHIPs wItH tHIrd-PArty PAyers

The third objective of healthcare financial management is to facilitate the organization’s relationship with each third-party payer, such as an insurance company, that will pay all or a portion of the bill. Private health insurance, Medicare, and Medicaid account for more than 82 percent of all personal health consumption expenditures (Martin et al. 2016). Financial management must be responsive to third-party payers and in many ways must treat third-party payers as customers because the third party pays the bill. At the same time,

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third-party payer








00_Nowicki (2339) Book.indb 8 5/17/17 10:57 AM

C h a p t e r ➤ 1 : ➤ F i n a n c i a l ➤ M a n a g e m e n t ➤ i n ➤ C o n t e x t 9

financial management must be attentive to the patient because the patient has influence over the third-party payer and in some cases may be partially responsible for the bill.

Influence metHod And Amount of PAyment

The fourth objective of healthcare financial management is to influence the method and amount of payment chosen by third-party payers. Third-party payers are becoming increas- ingly aggressive in asking healthcare organizations for discounts if they provide large numbers of patients. In certain cases, healthcare organizations are discounting prices below costs to maintain market share.

Some third-party payers, such as Medicare, are asking healthcare organizations to assume part of the financial risk for the patient by agreeing to a prospective payment, or, in other words, agreeing in advance to a price for providing care to a patient. Healthcare organizations lose money if they provide care that costs more than the prospective payment.

Some third-party payers are asking healthcare organizations to assume risk by agreeing to a capitated price (i.e., a price per head or subscriber) before the subscriber actually needs care. Capitated prices put healthcare organizations at risk for the cost of care, if needed.

monItor PHysIcIAns


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