A system in which purchasers hold providers of healthcare accountable for both the costs of healthcare and its quality is called __________.

A system in which purchasers hold providers of healthcare accountable for both the costs of healthcare and its quality is called __________.

• A. Capitation
• B. Value-based purchasing
• C. Fee-for-service
• D. Managed care

Answer: (B)

Value-based purchasing ties provider reimbursement to both the cost of care and the quality of that care. Purchasers—such as employers or insurers—use performance metrics to determine payments, rewarding high-quality, efficient care and penalizing waste or poor outcomes. This creates a direct accountability loop: providers are paid more when they deliver better results while keeping costs down. This differs from fee-for-service, which pays for each service regardless of outcomes and can incentivize more testing or procedures. Capitation pays a fixed amount per patient and shifts financial risk, but it doesn’t inherently require meeting quality benchmarks. Managed care emphasizes coordinating care and controlling utilization, but value-based purchasing specifically links payment to verified quality and cost performance, making accountability for both aspects explicit.

Value-based purchasing ties provider reimbursement to both the cost of care and the quality of that care. Purchasers—such as employers or insurers—use performance metrics to determine payments, rewarding high-quality, efficient care and penalizing waste or poor outcomes. This creates a direct accountability loop: providers are paid more when they deliver better results while keeping costs down.

This differs from fee-for-service, which pays for each service regardless of outcomes and can incentivize more testing or procedures. Capitation pays a fixed amount per patient and shifts financial risk, but it doesn’t inherently require meeting quality benchmarks. Managed care emphasizes coordinating care and controlling utilization, but value-based purchasing specifically links payment to verified quality and cost performance, making accountability for both aspects explicit.