DRGs are used to classify hospital cases into groups that are expected to have similar hospital resource use, and they are a key component of the reimbursement process for hospitals.
In a fee-for-service model, healthcare providers are compensated for each individual service or procedure they perform, encouraging quantity of care.
Under capitation, healthcare providers receive a set fee per patient per time period, which incentivizes cost control and efficient care management.
Value-based reimbursement models aim to improve healthcare quality and patient outcomes by linking payment to the effectiveness and efficiency of care, rather than the volume of services provided.
Various reimbursement models exist, including capitation, retrospective cost-based reimbursement, and fee-for-service. Each model represents a different approach to paying for healthcare services.
