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Cost Containment Strategies

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Research has suggested the hazards and ethical problems in the overuse of services in fee‐for‐service settings (where payment is made based on service rendered to individuals for individual services) rather than service underuse in capitated care (where payment is made based on service rendered to a group of patients) (Berwick 1994; Leape et al., 1990). Over the years, cost containment strategies have targeted the financing and reimbursement sides of health care. Financing strategies have used health services regulation and limitation by means of taxes or insurance premiums and encouraged competition such as managed competition. Reimbursement containment strategies have used regulatory and competitive price controls and utilization controls, such as capitation, patient cost sharing, and utilization management. Capitation and prospective payment have had some of the most significant impacts on cost containment.

Kelly Vana's Nursing Leadership and Management

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