Pricing Health Services for Purchasers : A Review of Methods and Experiences
This paper reviews methodologies and international experience related to costing and pricing health services. Several factors affect the determination of the prices purchasers pay for health services. These include: the method of provider payment;...
| Main Authors: | , |
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| Format: | Working Paper |
| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2013
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2004/09/5635196/pricing-health-services-purchasers-review-methods-experiences http://hdl.handle.net/10986/13764 |
| Summary: | This paper reviews methodologies and
international experience related to costing and pricing
health services. Several factors affect the determination of
the prices purchasers pay for health services. These
include: the method of provider payment; the availability of
information on costs, volumes, outcomes, and patient and
provider characteristics; methods used to calculate
providers' costs; and characteristics of purchasers and
providers-including the regulatory environment, provider
autonomy, negotiating power, and the degree of competition.
The paper focuses on methods for setting levels of payment
under different provider payment mechanisms. Line item and
global budgets remain the most common reimbursement methods
in developing countries. However, many of these countries
are implementing mixed payment systems that have greater
information demands. The principal payment types used in
high-income countries-capitation, payments per case or
diagnosis, and fee-for-service-are reviewed here, and
implications for low- and middle-income countries discussed.
To minimize incentives for under- or over-utilization,
prices that purchasers pay for health care services should
be related to the unit costs of services. However,
establishing the true unit cost of health services is
complicated, and detailed data needed to correctly allocate
indirect costs to the units of services are not generally
available in developing countries. The organizational
characteristics of health care providers and their
relationships with purchasers strongly influence the way
prices for health services are determined. Pertinent
characteristics include provider autonomy, provider
negotiating power, and the degree of competition. The
principal constraint on the development of provider payments
systems in developing countries is the limited availability
of information on costs, volumes, and patient
characteristics. However, international experiences reveal a
variety of options for setting prices for health care
purchasers in developing countries that are reforming their
payment systems. |
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