This form of payment generates strong incentives for becoming more efficient because the hospital can keep any surplus. It turns out to be especially effective in environments where individual physicians who work in hospitals can be compensated for their performance. There are huge incentives to control costs, but few incentives to substitute ambulatory care procedures for hospital treatment, or to innovate by developing new procedures for treating a given diagnosis. Diagnosis-related payments . Endorsing payments related to the diagnosis can generate strong incentives for cost control and for improving efficiency.
Hospitals receive a global amount for treating a patient with a specific diagnosis.
Finally, what needs to be emphasized is a concept that is fundamental to the development of provider payment mechanisms that contribute to the achievement of objectives of sectorial reforms. The quantity as much as the quality of services is affected by ways in which providers are compensated. Changes in payment mechanisms can have a significant effect on the incentives created in a health system. Return to Regional Forums Top Regional Forum on Health Sector Reform July 1999 Santa Cruz, Bolivia High level national delegates from Bolivia, Chile, Colombia, Ecuador, Peru and Venezuela gathered in Santa Cruz, Bolivia in July 1999 to share experiences and exchange ideas. The role of the State and the separation of functions in financing, insurance and health services provision.