Pricing health services for purchasers--a review of methods and experiences

Health Policy
Hugh R Waters, Peter Hussey

Abstract

This article reviews methodologies and international experience related to costing and pricing health services for health care purchasers. The main factors affecting price-setting methods are: (1) provider payment systems; (2) information available on actual costs, service volumes and outcomes; and (3) characteristics of providers and purchasers. These factors are strongly interrelated. Provider payment systems determine the unit of services to be priced. In order to minimize incentives for under- or over-utilization, the prices that purchasers pay for health care services should be related to the actual unit costs of services, but accurately calculating real unit costs is intensive in terms of resources and information. Pertinent provider characteristics influencing price-setting include provider autonomy, provider negotiating power, and the degree of competition. The article presents a series of examples that run through each of these three sets of factors. The examples are from Denmark, the UK, and Thailand (for capitation); Australia, Hungary, and the United States (for case-based payment); and Germany, Korea, and Taiwan (for fee-for-service payment mechanisms). From these experiences, the article concludes with appropriate...Continue Reading

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Citations

Feb 26, 2014·Global Health Action·Neha BaturaJolene Skordis-Worrall
Feb 26, 2009·Journal of Evaluation in Clinical Practice·Chinho LinChienwen Hong
Mar 28, 2007·The International Journal of Health Planning and Management·Gustaf Kastberg, Sven Siverbo
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Jan 1, 2011·The International Journal of Health Planning and Management·Inke Mathauer
Mar 25, 2015·Journal of Health Organization and Management·Paul Grant
Dec 6, 2018·The International Journal of Health Planning and Management·Eugenio Anessi-PessinaMarco Giovanni Rizzo
Aug 31, 2019·PharmacoEconomics Open·Shankar PrinjaThiagarajan Sundararaman
Apr 4, 2018·International Journal of Health Economics and Management·Margit MalmmoseClaus Holm
Jul 8, 2020·International Journal for Equity in Health·Leila DoshmangirVladimir Sergeevich Gordeev
Aug 29, 2016·Australian Health Review : a Publication of the Australian Hospital Association·Sharon HakkennesKim Lim
Mar 3, 2017·Health Economics Review·Margit Sommersguter-Reichmann, Adolf Stepan
Jun 19, 2020·Cost Effectiveness and Resource Allocation : C/E·Monika Raulinajtys-GrzybekMichał Chrobot

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