ASSIGNMENT

Insurance is based on pooling of losses, payment for random losses, risk transfer, and indemnification. As a result, insurers use several different approaches to mitigate their risk and set premium rates, including:

• the fee-for-service method
• the cost-plus approach
• population health – capitation

For your assignment, evaluate two global payment systems within healthcare and address each of the following items:

• Define the structure of the payment systems.
• Identify risk to loss of revenue in each system.
• Describe advantages and disadvantages of each system.
• Identify how pay for performance can be added to each payment system.