Payment Scheme Research Articles

Towards population-based payment models in multiple-payer systems: the case of the Netherlands

Introduction: The Dutch private multi-payer system is predominately paying providers on a fee-for-service basis, not incentivising efforts towards integrated care and prevention. Up to now, alternative payment models have not taken flight. Recent small-scale experiments in the Netherlands show substantial potential benefits of population-based payment models. Taking the Netherlands as an example, this study aims to analyse how such population-based payment schemes may be taken up more fiercely in systems running on the principles of managed competition. 
 Methods: PubMed and Medline were searched for international studies reporting on effects of introducing population-based payments compared to a control group. Quantitative results for both quality of care and healthcare utilisation were summarized and articles were qualitatively assessed to identify facilitators and barriers for implementation. Next, results of this review were presented to a panel of nine Dutch experts in the field of health policy to (1) validate and supplement findings from the literature review and (2) identify and determine processes to overcome barriers and enable further uptake of such payment schemes in managed competition systems.
 Key findings: The literature search yielded 24 studies reporting on 10 international cases. Cases showed predominantly positive effects for both healthcare utilisation and quality of care. Identified challenges related to measuring quality, linking indicators to financial incentives, having an inappropriate data infrastructure to facilitate monitoring, and possible long-term financial instability for providers. Initiators of reforms and the degree of involvement of national policies and legislation differed, but the decentralised nature of healthcare systems in which these reforms were implemented seems to offer opportunities for small-scale experiments rather than radically reforming the entire healthcare system. The expert panel found that the Dutch system aligns with such a bottom-up approach. Payers and providers can initiate population-based payment systems to fit local needs, but should determine clear preconditions that focus on quality of care. Quality indicators tied to financial incentives, such as shared savings, might minimise risks of undertreatment. Upfront investments are needed to facilitate necessary data infrastructure and reforms might be encouraged through nationally set default options towards integrated payment systems, potentially reducing administrative burdens. Strong leadership, trust, and mutual understanding are paramount to overcome silos to integrate services across providers. 
 Conclusions: Several international examples of population-based payment reforms in multiple-payer systems have shown promising results in the last couple of years, but implementation is often accompanied by various challenges. Successful experiments were often initiated bottom-up: payers and providers both have an active role in initiating such reforms, defining goals, and experimenting in local populations. Governmental bodies should have a facilitating rather than a directive role. 
 Implications: Whilst this paper used the Dutch healthcare system as their primary example, similar mechanisms and processes can act as a guide for the implementation of population-based payments in other multiple-payer settings. Policymakers in other multi-payer managed competition systems may therefore benefit from these insights to overcome barriers while transforming their healthcare systems through population-based payment schemes.
 

Optimal production and predictive maintenance decisions for deteriorated products under advance-cash-credit payments

In the 4th industrial revolution era, manufacturers tend to integrate predictive maintenance into production systems to maximize the lifespan of equipment and avoid costly disruptions. Using internet of things sensors and data analyses, predictive maintenance can significantly reduce the production downtime by detecting and predicting system problems before they become uncontrollable, resulting in a lower defective rate. Additionally, an advance-cash-credit (ACC) payment scheme is commonly applied in real-world business transactions to enhance cash flow flexibility among supply chain members. In this study, we developed a supplier–manufacturer chain, wherein a predictive-maintenance-adopting manufacturer received an ACC payment from a supplier, to demonstrate a supply chain management situation within the imperfect economic production quantity framework. The inventory system of the manufacturer was modeled as a cost minimization problem to determine the optimal replenishment cycle time and predictive maintenance effort for deteriorated products. The proposed model also adopted a discounted cash-flow analysis to consider the time value of the cost function, which was proven to be strictly convex in the replenishment time and predictive maintenance effort. Furthermore, a numerical and sensitivity analysis was conducted to illustrate the effectiveness of the proposed model and gain management insights.

Does gender affect medical decisions?

It is rarely the case in medical practice that differences between female and male physicians can be described under ceteris paribus conditions. Physicians self-select their type of practice, patients self-select physicians, and physicians are expected to account for both the context and the characteristics of their patients when providing medical treatment. As a result, reported gender differences in medical practice can have several alternative interpretations. A key question, therefore, is whetherthe treatment of a given patient is expected to depend on the gender of the physician. To address this question, we quantify gender effects using data from an incentivized laboratory experiment, in which Chinese medical doctors and Chinese medical students choose medical treatment under different payment schemes. We estimate preference parameters of females and males assuming decision makers have patient-regarding preferences. We cannot reject the hypothesis that gender differencesin treatment choices are absent. The differences between preference parameters of females and males are not statistically significant, and there is no evidence that the degree of randomness in choices differs between genders. The absence of gender effects in the laboratory, where choice context is fixed, provides nuance to previous findings on gender differences, and highlights the general difficulty of separating individuals’ behavior from their context.

Privacy-Preserving and Traceable Blockchain-Based Charging Payment Scheme for Electric Vehicles

With the rapid development of the global clean energy industry, the electric vehicle (EV) has gradually replaced the traditional fuel vehicle as a promising modern transportation tool due to its environmental friendliness and competitive prices. Its widespread adoption has led to a substantial increase in demand for subsidiary facilities such as charging piles and stations. Despite the convenience and accessibility offered by charging services, the privacy of EV users may be compromised in the process, as malicious attackers can infer their true identities and consumption habits from service orders. Existing studies introduce blockchain technology into vehicle charging payment scenarios to protect the privacy of EV users. Unfortunately, it cannot achieve the desired full anonymity and may even hinder electricity regulators’ investigation of suspicious transactions and entities. Therefore, designing a vehicle charging payment scheme that simultaneously supports privacy protection and traceability is a challenge. To address these concerns, this paper proposes a privacy-preserving and traceable blockchain-based charging payment (PTB-CP) scheme for EVs. It can protect users’ identity privacy and transaction unlinkability and track abnormal transactions or entities in exceptional circumstances. We conduct a comprehensive analysis of PTB-CP from both theoretical and experimental aspects. The analysis results demonstrate that our scheme can realize privacy protection, reliability & authentication, traceability, scalability, and high efficiency.

Pricing strategy of first-enjoy-after-pay service offered by two-sided media platforms

PurposeThis study highlights the impact of mental accounts on a user's decision-making regarding payment schemes and aims to determine the pricing strategy for the first-enjoy-after-pay service offered by the two-sided media platforms.Design/methodology/approachThis study establishes a game-theoretic model and utilizes backward induction to derive the equilibrium price by maximizing the monopolist's profit.FindingsThe findings indicate that the conditions for a two-sided media platform to offer the first-enjoy-after-pay service depend on the trade-off between pleasure attenuation and pain buffering and the effect of time discounts. Moreover, the authors found that the time discount is a critical factor in determining pricing strategies under various payment schemes offered by the platform.Research limitations/implicationsThis work adopts a uniform pricing strategy for users who opt for either immediate or post-payment schemes. Nevertheless, it is important to note that this approach has limitations in terms of offering discriminatory pricing for those who choose both payment schemes.Practical implicationsThis analytical work provides valuable insights for two-sided media platforms to optimize their payment scheme strategies and pricing considering the influence of a user's mental account.Originality/valueIn a two-sided media platform, the authors provide applicable conditions for the platform to offer first-enjoy-after-pay service considering the effect of mental accounts. Further, the authors show the optimal pricing strategy under different payment schemes provided by the platform.

Country-level effects of diagnosis-related groups: evidence from Germany’s comprehensive reform of hospital payments

Hospitals account for about 40% of all healthcare expenditure in high-income countries and play a central role in healthcare provision. The ways in which they are paid, therefore, has major implications for the care they provide. However, our knowledge about reforms that have been made to the various payment schemes and their country-level effects is surprisingly thin. This study examined the uniquely comprehensive introduction of diagnosis-related groups (DRGs) in Germany, where DRGs function as the sole pricing, billing, and budgeting system for hospitals and almost exclusively determine hospital revenue. The introduction of DRGs, therefore, completely overhauled the previous system based on per diem rates, offering a unique opportunity for analysis. Using aggregate data from the Organisation for Economic Co-operation and Development and recent advances in econometrics, we analyzed how hospital activity and efficiency changed in response to the reform. We found that DRGs in Germany significantly increased hospital activity by around 20%. In contrast to earlier studies, we found that DRGs have not necessarily shortened the average length of stay.

Motivational factors to paying zakat through institutions: a multigroup analysis of urban and suburban muzakki based on digital payment scheme

Purpose This study aims to empirically explore several factors that encourage muzakki (zakat payers) to pay their zakat through institutions by elaborating on their extrinsic and intrinsic motivations as the composite factors regarding the attitude and intention improvement of muzakki. This study specifically studies zakat payment via digital means and categorizes the muzakki groups into two (urban and suburban) to be considered in the results. Design/methodology/approach Overall, this study gathers the data from 298 muzakki using a partial least squares technique the multigroup analysis to compare the analysis. Findings This study found that different sociodemographic aspects will result in varied performances of motivation in using technology between the two groups. Furthermore, positive preference aspects, such as muzakki’s attitude, can be a catalyst in improving their motivation to pay zakat through institutions. Practical implications The findings of this study can be used as a foundation to improve the technology-based services that will be more accessible and reachable. Provision of technical follow-ups regarding the utilization of technology, including community-based digital platform socializations, availability of online customer service that will respond to muzakki’s needs and synergy between stakeholders, are the primary obligations that a zakat institution must fulfill. Originality/value As far as the researchers are concerned, the studies focusing on the motivational factors and attitude of muzakki as an intervention in paying zakat via institutions are limited in numbers, especially studies on digital payment. In this study, however, classifying the groups into two will help gain a deeper understanding of this topic.

HPR120 Investigating the Nature and Scope of Innovative Payment and Pricing Schemes for Health Technologies

HPR120 Investigating the Nature and Scope of Innovative Payment and Pricing Schemes for Health Technologies

Impact of direct payments and non-financial support on smallholder income from environmentally friendly agriculture in Tohoku region, Japan

In the face of climate-related challenges in agriculture, Japan's ‘Direct Payment for Environmentally Friendly Farming’ policy stands as a proactive effort to incentivize sustainable practices among smallholder farmers. This study evaluates the policy's impact on smallholder farmers' net farm income within the Tohoku Region, employing a propensity score matching (PSM) methodology to analyze survey data encompassing household-specific attributes and engagement with the policy. Our results indicate that participation in the direct payment scheme enhances farmer income, averting an estimated reduction of 125 thousand JPY per annum. While direct payments demonstrated a positive effect on smallholder income, our findings surprisingly revealed that skill training, a key non-financial support, had a negligible impact on household earnings. The findings highlight the policy's efficacy in promoting practices that decrease reliance on chemical inputs and increase organic farming, thereby contributing to carbon emissions mitigation. Notably, our analysis suggests that subsidies directed towards integrating renewable energy on farms may have a less immediate financial impact compared to other forms of support. This research underscores the complex interplay between agricultural subsidies, environmental sustainability, and farmer income, revealing that direct financial incentives are pivotal in fostering climate-conscious agricultural practices among smallholders.

A year of the Animal Health and Welfare Pathway: focus on sheep

As of February 2023, qualifying farmers in England have been able to apply for a government‐funded annual vet visit – the Annual Health and Welfare Review – as part of the Animal Health and Welfare Pathway (AHWP) (non‐Basic Payment Scheme farmers have been able to apply since late September 2023). A year on since the AHWP was first launched, this article outlines how the pathway is working, the sector‐specific endemic disease schemes and how to conduct (and apply for) a vet visit. To illustrate how the scheme is working on a more practical level, the article focuses on the sheep sector specifically, and includes case studies about the AHWP from both the client and vet perspective, highlighting just how much can be covered in the annual review.

Energy Trading and Power Allocation Strategies for Relay-Assisted Smart Grid Communications: A Three-Stage Game Approach

In smart grid, serious packet loss often occurs in the process of information interaction between the Utilities and customers, which results in supply-demand deviation and further increases the cost of the Utilities. In order to improve the information transmission performance of communication networks, the Utilities purchase relay service from telecom operator to help data aggregator units (DAU) transfer information to gateway (GW), so as to improve communication quality and reduce the cost of the Utilities. Secondly, in order to solve the problem of telecom operators' energy reduction and reduce the cost of purchasing energy, we utilize energy supply point (ESP) to collect the surplus energy of retail customers for energy supply, and telecom operator pays a certain amount of remuneration to ESP in exchange for ESP to continuously supply energy to telecom operator. Then, we establish a three-stage game method and system model between the Utilities, telecom operator and ESP, and propose the relay power allocation and energy transaction pricing strategy. Due to the real-time change of energy demand, we consider two situations of energy oversupply and conservative supply, and use the backward induction method and iterative algorithm to obtain the equilibrium solution of the Stackelberg game, including the unit energy price of ESP, total power of telecom operator, the proportion of transmission power allocated to the relay service, and payment scheme of the Utilities. Simulation results show that the proposed algorithm can quickly and accurately converge to the optimal solution of the problem, and the method can improve the stability of demand-side regulation, reduce the cost of the Utilities and increase the profit of telecom operator.

Interval valued inventory model for deterioration, carbon emissions and selling price dependent demand considering buy now and pay later facility

Uncertainty refers to a lack of precise knowledge or information about a particular event, situation, or outcome. It is an inherent characteristic of many real-world phenomena and is often associated with the presence of risk or ambiguity. Uncertainty can arise due to various factors, such as incomplete information, unpredictability, complexity, or variability of a system or process. In many cases, uncertainty can lead to difficulties in decision-making and pose challenges in planning, forecasting, and managing risks. There are different types of uncertainty, including epistemic uncertainty, which arises from the inherent randomness or variability of a system or process. This study encompasses the inclusion of all inventory parameters as uncertainty parameters, which are expressed in the form of intervals. Furthermore, demand for the product is taken into account in interval form. The conversion of the differential equation into an interval differential equation is carried out in order to account for the variability in demand within a certain interval. The utilisation of the centre-radius technique leads to the derivation of the related optimisation problem under a ‘buy now, pay later’ (BNPL) payment scheme. In order to demonstrate the concept, a numerical case is selected and solved with the MATHEMATICA software and interval order relations. In the end, a comprehensive sensitivity analysis has been conducted to derive insightful conclusions pertaining to this study.

BS O09 Bariatric Medical Tourism - a false economy. A case series of complications and the impact on the NHS

Abstract Background Increasing numbers of patients from the United Kingdom are going abroad for treatment, in order to avoid lengthy NHS waiting lists for primary weight loss surgery and to circumvent restrictions on cosmetic operations, post-bariatric surgery. News media often report individual patient stories about post-operative complications. Patients are increasingly accessing NHS emergency services when these occur. The aim of this study was to evaluate the impact on both patients and the NHS from treatment of complications associated with Bariatric medical tourism. Methods A retrospective case study was performed between July 2022-June 2023 at East Surrey Hospital, the nearest hospital to London Gatwick Airport. The study included all patients who presented as an emergency with complications associated with bariatric or post-bariatric procedures performed outside of the UK. Data was collected via electronic patient records, including patient demographics, BMI, original operation, complications, investigations, treatment and length of stay. A cost analysis was performed for each patient’s ‘in-patient’ stay using the ‘NHS Payment Scheme (2023/24)’. Further cost analysis of ongoing community intervention was not performed. Results A total of 15 patients were identified in this time frame. 13 (86.6%) were female with mean age 40 years (range 27-54). Mean BMI was 35 (range 29-44). The most common original operation was post-bariatric Abdominoplasty (46.6%), followed by Laparoscopic Sleeve Gastrectomy (26.6%). 14 (93.3%) patients had their original operation performed in Turkey. Time to emergency presentation ranged from 7-365 days. 66.7% of complications were graded Clavien Dindo score 3 or above. 8 (53.3%) patients required multiple admissions. The average length of stay was 7.5 days (range 1-37). The cost per patient to the NHS averaged at £6857.14 (£600-£28,625). Conclusions This study shows that medical tourism has a significant impact on NHS services, costing over £100,000 in our hospital alone, in one year. Common factors in this patient cohort included poor pre-operative optimisation, continued smoking, vitamin and mineral deficiencies and delayed presentation once complications occurred. Given that medical tourism is increasing, public health education about the risks should increase. Such efforts may mitigate the cost impact on the NHS. It is time for a national registry for international complications and a UK governance strategy is implemented.

Capacity Payments in the Turkish Electricity Market: A Necessity or Policy?

Capacity mechanisms have been implemented in different forms for various purposes. Contrary to altering trends in the electricity markets, Türkiye opted for enforcing “capacity payments,” regarded as a primitive form of the mechanisms to ensure the security of supply and system reliability. This study mainly aims to build a critical review of the Turkish capacity mechanism design. The survey conducted makes valuable inferences along with the opinions of different stakeholders. The results indicate that the current capacity payment scheme, a non-market based, is not sustainable in the long run. Therefore, improving the existing payment methodology by reconsidering mechanism’s scope and different age criteria, efficiency, and deliverability for plants or implementing other types of mechanisms with a market reform, such as demand response participation, seems more efficient.

Evaluating the determinants of participation in conservancy land leases and its impacts on household wealth in the Maasai Mara, Kenya: Equity and gender implications

Understanding the impact of conservation interventions on local communities is important in determining their effects on livelihoods and wellbeing. However, impacts are often not uniform and there are important equity dimensions when evaluating interventions. Therefore, in this paper, we investigate determinants of participation in conservation land leases in the Mara Conservancies in southern Kenya and its impact on household wealth. We find that land ownership determines who can participate in and benefit from conservancy land lease payments, and by how much. The design of the land lease payment scheme therefore has the potential to reinforce and, in cases, amplify existing inequities as it is built upon a legacy of unequal historical land distribution processes that limit the participation of women and poor landless households. We observed significantly higher incomes amongst participant households compared to non-participants, but these differences disappeared after propensity score matching. These results suggest that the differences were not caused by participation in conservancies. Our findings suggest that the design and outcomes of land-based conservation or payment for ecosystem services schemes should consider historic and existing land tenure systems if they are to reduce inequality.

Impact of Physician Payment Scheme on Diagnostic Effort and Testing

Diagnostic errors are common and can result in serious patient harm. Making the right diagnosis often requires significant diagnostic effort. Yet most physician payment schemes are procedure based and do not account for diagnostic effort or accuracy because of observability issues. In this paper, we develop a parsimonious model to examine the impact of a physician payment scheme on a physician’s decisions to (1) exert diagnostic effort and (2) perform a confirmatory test. High effort provides an informative (though imperfect) signal of the patient’s true state; the test is confirmatory in that it is a prerequisite for diagnosing a severe condition. Our model uses a two-step diagnostic process to capture the interaction between the physician’s diagnostic effort and testing decisions. We show that under a fee-for-service payment scheme, the physician may view the diagnostic effort and the confirmatory test as either complementary or substitutive, depending on the additional revenue from testing. We also reveal nonmonotonic properties such that a more patient-centered physician may not exert more effort or provide a more accurate diagnosis. In addition, either a flat or differentiated payment scheme may be optimal. We also show that an alternative payment scheme, under which the revenue from the confirmatory test is contingent on its result, can induce the social optimum under certain conditions. With the advent of artificial intelligence as part of the standard of care and its increasing use as confirmatory tests, our research has implications for the design of physician payment systems in light of concerns about the potential erosion of individual attention. This paper was accepted by Jayashankar Swaminathan, operations management. Funding: T. Dai was supported by the Johns Hopkins Discovery Award (2022–2024) and the Hopkins Business of Health Initiative Seed Grant (2022–2023). Supplemental Material: The online appendix and data files are available at https://doi.org/10.1287/mnsc.2023.4937 .

The Future of HSR Program Evaluation: A European Perspective

Abstract There is a long tradition of program evaluation in public health, due to the influence of medical approaches and the development of evidence-based medicine. Health services research have thus provided substantial evidence and built itself partially on the evaluation of organizational innovations over time in various international healthcare settings. What is new here? What is the future of HSR from an evaluation perspective? Since the turn of the century, two main shifts in the resources and methods available to public health researchers could provide a significant leap for HSR research in Europe, and in France especially. First, more data are being produced and made available to researchers. Most healthcare systems in Europe have implemented DRGs and for doing so, information systems have been developed incidentally. This led to the routine production of data initially used for payment schemes, that are now increasingly being used for research. Although this is similar to what happened in the US, the main difference with European healthcare systems lies in the generalized approach of the welfare system to the whole population. Second, evaluation methods recently evolved towards the framework of what is known as “realist evaluation” based on the causal analysis of programs or public policies while incorporating contextual effects and a theoretical perspective to explain rather than merely measure the effect - or lack thereof. To conclude, we shall argue that the future of HSR program evaluation may bring together researchers, health professionals and policymakers to discuss, explore, experiment and implement innovative actions in healthcare to address the challenges to come.

Predictably competitive? What faces can tell us about competitive behavior

Competition for limited resources is ubiquitous in social and economic life and has sparked a large body of research on the determinants of competitive behavior. While we know a lot about the role of contextual factors and personality traits, the potential link between competitive behavior and physical appearance remains unexplored. In this study we test whether objective facial characteristics and subjective attractiveness ratings are related to the competitive behavior in the form of opting for a tournament payment scheme in a real-effort task. We find no association for any of the examined characteristics. Nevertheless, we show that individuals are significantly better than chance at predicting the competitiveness of experimental participants, just by looking at their headshots. These findings advance our understanding of the role of observable physical characteristics as telltale signs of behavior.

Payment schemes for sustaining cooperation in dynamic games played over event trees

We propose two payment schemes to sustain cooperation in the class of dynamic games played over event trees, where the transition between nodes is determined by Nature. The planning horizon is given and finite, but the game can terminate at any intermediate stage. The two payment schemes share some desirable properties, e.g., dynamic individual rationality, stability against deviation along the cooperative state trajectory, and efficiency, but differ in some other features. We illustrate the construction of two payment schemes with an example in environmental economics.

On the core of a patent licensing game

This note revisits the impossibility result shown by Watanabe and Muto (2008) that almost all outcomes cannot be in the core of a patent licensing game. To overcome this difficulty, we consider a weaker stability concept by restricting objections against payoff distributions to the ones made under an exogenously fixed payment scheme and a payment rate. In contrast to their result, we demonstrate that the coalition structures in which licensee firms are the majority can be stable in this sense. However, such a possibility result breaks down if we allow negotiations on the payment rate.