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Allocating global package pricing. The example of bypass surgery.

J F Biebuyck1, J Locke

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Medical Group Management Journal
|December 9, 1995
PubMed
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Distributing new physician payment rates equitably is challenging. Package pricing models require cost justification and negotiation, necessitating robust economic models for fair business decisions.

Area of Science:

  • Health economics
  • Healthcare management
  • Physician compensation

Background:

  • Equitable distribution of changing physician payment rates is a significant challenge for healthcare organizations.
  • Package pricing, where practitioners justify fees and negotiate allocations, is a proposed solution but lacks practical examples.

Purpose of the Study:

  • To outline the development of successful package pricing models for physician compensation.
  • To introduce an economic model that supports practice business decisions regarding marginal production opportunities.

Main Methods:

  • Determining actual practice costs.
  • Analyzing historical charge and payment patterns.
  • Incorporating Medicare payment rates into the model.

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Main Results:

  • The study proposes a framework for creating equitable physician compensation models.
  • It emphasizes the need for economic models to guide business decisions in healthcare practices.

Conclusions:

  • Successful package pricing requires a comprehensive economic model.
  • This model should facilitate informed business decisions benefiting all parties involved in physician compensation.