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Compensation Systems

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Healthcare Management

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Abstract

The design of compensation systems for service providers is an essential control instrument in managed care. In order to better understand this instrument and its effects, the basic principles of compensation systems will first be generally described (see Fig. 10.1) so that the managed care compensation systems can be outlined in more detail.

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Notes

  1. 1.

    A basic salary for a fixed time period is also possible for hospital services. In this case, the hospital receives a budget, for example for a year, from which it has to finance all costs. In practice, however, hospital budgets are combined with other forms of compensation.

  2. 2.

    In contrast to that, the remaining compensation forms are referred to as “prospective compensation forms” or “prices”.

  3. 3.

    The reference value is the potential patient. Sometimes the term is also used for the patient rate: a flat rate for the contacting patient. This is not the case here. Likewise, this does not refer to the capitation, which is discussed in the sense of financing healthcare.

  4. 4.

    The term “fee-for-service” means a form of compensation in the strict sense. In a wider sense this term is used to refer to the traditional form of insurance.

  5. 5.

    This procedure is similar to the remuneration procedure for outpatient services in public health insurance in Germany.

  6. 6.

    This term refers to the risk of a change in behaviour of the insured person after the conclusion of the contract (too little prevention, inappropriate utilisation of services), in the furthest sense also changes in the behaviour of service providers (introduction).

  7. 7.

    This adjustment to risks ex-post should be differentiated from the ex-ante consideration of the risks in the insurance structure by differentiating capitations (risk adjustment).

  8. 8.

    In addition, criteria for success can be taken into account here.

  9. 9.

    Performance-based compensation, success-based compensation or pay-for-performance are referred to as synonyms. Quality-based compensation, however, already focuses on the decisive factor in the word.

  10. 10.

    Five to ten percent of the service provider’s annual income improves the quality of care (Underwood 2007).

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  1. Institute for Epidemiology, Social Medicine and Health Systems Research, Hannover Medical School, Hannover, Germany

    Volker Eric Amelung

  2. Institute of Health Sciences Research INAV GmbH, Berlin, Germany

    Volker Eric Amelung

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Amelung, V.E. (2019). Compensation Systems. In: Healthcare Management. Springer Texts in Business and Economics. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-662-59568-8_10

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