All-payer rate setting is a price setting mechanism in which all third parties pay the same price for services at a given hospital.
[ It can be used to increase the ]market power
In economics, market power refers to the ability of a firm to influence the price at which it sells a product or service by manipulating either the supply or demand of the product or service to increase economic profit. In other words, market powe ...
of payers (such as private and/or public insurance companies) versus providers, such as hospital system
A hospital network is a public, non-profit or for-profit company or organization that provides two or more hospitals and other broad healthcare facilities and services. A hospital network may include hospitals in one or more regions within one ...
s, in order to control costs. All-payer characteristics are found in most developed economies with multi-payer healthcare systems, including France
France (), officially the French Republic ( ), is a country primarily located in Western Europe. It also comprises of Overseas France, overseas regions and territories in the Americas and the Atlantic Ocean, Atlantic, Pacific Ocean, Pac ...
, Germany
Germany,, officially the Federal Republic of Germany, is a country in Central Europe. It is the second most populous country in Europe after Russia, and the most populous member state of the European Union. Germany is situated betwe ...
, Japan
Japan ( ja, 日本, or , and formally , ''Nihonkoku'') is an island country in East Asia. It is situated in the northwest Pacific Ocean, and is bordered on the west by the Sea of Japan, while extending from the Sea of Okhotsk in the north ...
, and the Netherlands
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, established_title = Before independence
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.U.S. state
In the United States, a state is a constituent political entity, of which there are 50. Bound together in a political union, each state holds governmental jurisdiction over a separate and defined geographic territory where it shares its sover ...
of Maryland
Maryland ( ) is a state in the Mid-Atlantic region of the United States. It shares borders with Virginia, West Virginia, and the District of Columbia to its south and west; Pennsylvania to its north; and Delaware and the Atlantic Ocean to ...
also uses such a model.healthcare reform
Health care reform is for the most part governmental policy that affects health care delivery in a given place. Health care reform typically attempts to:
* Broaden the population that receives health care coverage through either public sector insur ...
measure. The proposal for a public option (a voluntary, publicly sponsored insurance plan similar to Medicare) has been cited as indirectly sharing some of the same goals as all-payer rate-setting systems.
Maryland
Since the late 1970s, Maryland has operated an all-payer system for hospital services. An independent commission establishes the rate structure for each hospital. That eliminated hospital cost shifting across payers and spread more equitably the costs of uncompensated care and medical education and limited cost growth, but per capita
''Per capita'' is a Latin phrase literally meaning "by heads" or "for each head", and idiomatically used to mean "per person". The term is used in a wide variety of social sciences and statistical research contexts, including government statistic ...
Medicare hospital costs are among the country's highest.Social Security Act
The Social Security Act of 1935 is a law enacted by the 74th United States Congress and signed into law by US President Franklin D. Roosevelt. The law created the Social Security program as well as insurance against unemployment. The law was pa ...
, is tied to a growth limit in payment per admission, and entitles the state's hospitals to $2 billion per year in additional revenues from the federal government. The Medicare waiver created incentives to increase the volume of services. Medicare pays higher rates for hospital services in Maryland than it does under the national prospective payment system A prospective payment system (PPS) is a term used to refer to several payment methodologies for which means of determining insurance reimbursement is based on a predetermined payment regardless of the intensity of the actual service provided.
It in ...
s.[
On January 10, 2014, the ]Centers for Medicare and Medicaid Services
The Centers for Medicare & Medicaid Services (CMS), is a federal agency within the United States Department of Health and Human Services (HHS) that administers the Medicare program and works in partnership with state governments to administer M ...
(CMS) and the State announced a new model that will focus on overall per capita expenditures for hospital services as well as on improvements in the quality of care and population health outcomes.[
]
See also
* Capitation (healthcare)
Capitation is a payment arrangement for health care service providers. It pays a set amount for each enrolled person assigned to them, per period of time, whether or not that person seeks care. The amount of remuneration is based on the average ...
* Fee-for-service Fee-for-service (FFS) is a payment model where services are unbundled and paid for separately.
In health care, it gives an incentive for physicians to provide more treatments because payment is dependent on the quantity of care, rather than quality ...
* Single-payer health care
Single-payer healthcare is a type of universal healthcare in which the costs of essential healthcare for all residents are covered by a single public system (hence "single-payer").
Single-payer systems may contract for healthcare services from p ...
References
{{reflist
Health economics
Health care reform