Health Care Financing

Health care services simply cannot be delivered without a method for paying for them. In the U.S., the financing of health care is shared among employers, government, and individuals. This complex and multi-faceted system influences every aspect of providing health care services to those that need them.

Health Care Payment Strategies & Methods

When paying for health care services for Medicaid members and clients of other government programs, state and other public agencies have a difficult balance to strike — and the Center for Health Law and Economics at UMass Medical School makes that an achievable goal.

Our expert staff understands that, on one hand, as stewards of public funds raised primarily through taxes, states and agencies must seek to pay as little as possible. On the other hand, the compensation must be high enough to attract the participation of enough health care providers to offer quality services for the number and geographic dispersion of the clients served by the programs.

Determining just what an agency should pay for a particular service, and then how that payment system should be structured, is a core expertise of the Center for Health Law and Economics at UMass Medical School. For example, our staff has designed payment methods for Medicaid and state public health programs that range from inpatient and outpatient acute hospital services to community-based programs, such as the Women, Infants, and Children (WIC) nutrition program.

In addition to the payment level, public entities must carefully consider the incentives and disincentives of their payment methodologies. It is critically important to develop incentives that are aligned with agencies’ public policy goals. Health care payment systems must also be critically assessed to determine whether a proposed payment method could result in undesired provider behavior.

Staff at the Center for Health Law and Economics has designed public payment systems for providers ranging from acute hospitals to shelter services to homeless families.  This sophisticated work includes assessing the costs to providers of delivering services, how payment structures interact with often complex service delivery, and using a range of incentives and disincentives to encourage particular provider behavior.