Final answer:
Payer-driven price competition is a cost containment approach in healthcare where payers negotiate prices with healthcare providers based on factors like quality and efficiency. This can encourage providers to offer competitive pricing and improve the affordability of healthcare services.
Step-by-step explanation:
Payer-driven price competition refers to a form of cost containment in healthcare where the prices of medical services are determined by the purchasers or payers, such as insurance companies or government programs. In this approach, the payers negotiate with healthcare providers to set prices for medical services based on factors such as quality, efficiency, and market competition. This can incentivize healthcare providers to offer competitive pricing and improve the value and affordability of healthcare services.
For example, insurance companies may negotiate lower prices with hospitals for certain procedures or treatments in order to reduce overall healthcare costs. This can result in cost savings for both the insurance company and patients.