List of Common Objectives and Potential Unintended Consequences TOOL 1 of Provider Payment Methods Payment Intended Objectives Unintended Consequences Method More equitable resource allocation Excessive decrease in input use More efficient output mix (e.g., Underprovision of services increased prevention vs. referral Reduced quality services) Over-referral (including “internal More efficient input use Capitation referrals”) Improved provider responsiveness and Reduced productivity patient experience Avoidance of sicker or higher-cost Cost management registered persons Reduced administrative burden Cost escalation Engagement with the private sector Excessive decrease in input use Increased fairness of payment and/or length of hospital stays More efficient output mix (e.g., shifting Increased admissions beyond from inpatient to outpatient services necessary (including fraudulent or services delivered at the practices to increase admissions) appropriate level) Increased early discharges and based More efficient input use readmissions (e.g., Increased productivity Avoidance of sicker or higher-cost Cost management patients Reduced administrative burden Upcoding or inappropriate multiple groups) Improved internal management of diagnoses hospitals Unbundling of services Improved data quality Provision of services beyond clinical Engagement with the private sector capability Cost escalation Increased number of services, including above the necessary level Increased productivity Shift toward higher-cost services Increased access to services Excessive decrease in inputs used per service Increased provider responsiveness Fragmentation of services Cost escalation If global budgets are formed on inputs: underprovision of services, increased referrals, increased inputs Global Cost management If global budgets are formed based budget More efficient input use on volume: increased volume of services, increased referrals to other providers, excessive decrease in input use
TOOL 1 List of Common Objectives and Potential Unintended Consequences of Provider Payment Methods Payment Method Intended Objectives Unintended Consequences Capitation More equitable resource allocation More efficient output mix (e.g., increased prevention vs. referral services) More efficient input use Improved provider responsiveness and patient experience Cost management Reduced administrative burden Engagement with the private sector Excessive decrease in input use Underprovision of services Reduced quality Over-referral (including “internal referrals”) Reduced productivity Avoidance of sicker or higher-cost registered persons Cost escalation (e.g., groups) Increased fairness of payment More efficient output mix (e.g., shifting from inpatient to outpatient services or services delivered at the appropriate level) More efficient input use Increased productivity Cost management Reduced administrative burden Improved internal management of hospitals Improved data quality Engagement with the private sector Excessive decrease in input use and/or length of hospital stays Increased admissions beyond necessary (including fraudulent practices to increase admissions) Increased early discharges and readmissions Avoidance of sicker or higher-cost patients Upcoding or inappropriate multiple diagnoses Unbundling of services Provision of services beyond clinical capability Cost escalation Increased productivity Increased access to services Increased provider responsiveness Increased number of services, including above the necessary level Shift toward higher-cost services Excessive decrease in inputs used per service Fragmentation of services Cost escalation Global budget Cost management More efficient input use If global budgets are formed based on inputs: underprovision of services, increased referrals, increased inputs If global budgets are formed based on volume: increased volume of services, increased referrals to other providers, excessive decrease in input use