15 Jul Healthcare Payer: A Definition and What You Need to Know
The healthcare industry has so many players who must work together but all of them play different roles toward ensuring that patients receive the services they need. With proper leveraging of the various stakeholders, especially healthcare providers, there can be value-based service delivery for the payers. In this piece, various terms like healthcare payer, and how they facilitate healthcare provision are explored..
Who are payers in healthcare?
Do you want to understand the definition of “healthcare payer”? Payers in healthcare can be described as entities, organizations, or people- who make payments for the services rendered by a healthcare provider. Some of the roles that healthcare payers play include setting rates for services, collecting payments, settling claims from providers, and processing claims.
Entities that make up healthcare payers
Healthcare payers, include a diverse range of entities such as:
Government or public programs
These are programs funded by the government to offer healthcare coverage to certain groups. Some examples of this category of payers in healthcare are Medicaid and Medicare in the US, where the former cares for low-income people, while the latter covers the elderly.
Commercial health payers
These are private insurance companies that are in essence commercial entities, that provide individuals and organizations with health insurance plans. Such healthcare payers collect premiums, process claims, and reimburse the providers for the services they provide.
Self-payers
These are individuals who take care of their own expenses for healthcare without insurance. They include people who have high deductible health plans and those who opt not to have health insurance coverage. Usually. these types of healthcare payers are excluded from discussions about payers in healthcare.
What is the importance of payers in the healthcare industry?
When delving into a healthcare payer definition, it is vital to know the importance of these players because they play crucial roles in shaping the industry. Their decisions have far-reaching implications in healthcare including affecting the cost of services to availability of care.
Here are some crucial functions of payers in healthcare:
- Setting payment rates – payers engage providers in negotiations for healthcare services and these determine what providers receive after treating patients.
- Processing claims- upon offering medical care, providers submit claims to healthcare payers for reimbursement or settlement. Payers take up verification of the services offered, determine the amount owed, and disburse the money.
- Managing healthcare providers and networks – many healthcare payers enter into contracts with providers establishing networks of medical facilities or professionals. Consequently, such agreements and networks influence where patients seek treatment.
- Influencing the provision of some healthcare services- through reimbursement structures and payment policies payers in healthcare can discourage or incentivize certain procedures and medical treatments.
- Regulating healthcare costs- payers put in place strategies to help manage healthcare costs, for instance, case management, utilization management, and disease management programs.
Understanding the impact of healthcare payers on individuals
Individual healthcare experience is greatly dependent on the healthcare payer they choose or rely on. For example, things like access to certain procedures and medical care, out-of-pocket costs, and coverage vary from one payer to another. Thus, understanding the details of different payers in healthcare is essential in making informed healthcare decisions.
Conclusion
As far as the definition of healthcare payer is concerned, these are entities that settle payments for medical services, besides playing other crucial roles. Payers are vital players in healthcare as they influence the cost of services, access, and even the quality of care. You can easily navigate the healthcare system if you have a good grasp of the various kinds of payers and their roles.
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Last Updated on October 15, 2024 by Marie Benz MD FAAD