Final answer:
The EHR Incentive Programs impose penalties for healthcare entities that fail to demonstrate meaningful use of electronic health records. To mitigate moral hazard, the system has evolved from fee-for-service to managed care and hybrid payment models. These changes impact the incentives for healthcare providers in how they deliver patient care.
Step-by-step explanation:
The EHR Incentive Programs provide penalties for Medicare-eligible professionals, eligible hospitals, and critical care hospitals that do not successfully demonstrate meaningful use. The concept of meaningful use involves the effective, efficient, and secure use of electronic health records (EHRs) to improve patient care. In order to address the issue of moral hazard, incentives for healthcare providers have shifted from a traditional fee-for-service model to one that incorporates elements of managed care, such as Health Maintenance Organizations (HMOs) and value-based care.
Under the fee-for-service system, healthcare providers are motivated to offer more services since their pay increases with the quantity of care provided. This system is countered by the managed care approach, wherein providers are paid a fixed amount per patient or receive payments based on patient health outcomes. This approach aims to provide incentives for healthcare providers to limit unnecessary services and focus on delivering quality care.
Many doctors are currently paid through a combination of fee-for-service and managed care, meaning they receive a flat amount per patient with additional payments for treating specific health conditions. This hybrid approach seeks to balance incentives to provide necessary care while discouraging the provision of unnecessary or excessive services.