Because providers receive the same payment regardless of quality of care, some might be moved to offer less thorough and less personalized service. Because providers only receive fixed rates, some might seek to employ cost-cutting measures to maximize profits while not necessarily keeping their patients' best interests in mind. Prospective payment plans also come with drawbacks. Additionally, prospective payment plans tend to motivate providers to deliver the most efficient care possible. Prospective payment plans also have the potential to save insurance companies money, and when that happens, some of those savings may be passed on to patients in the form of lower annual premiums and copayments. Because these plans pay fixed rates, providers and insurers can better manage and estimate costs and payments. Prospective payment plans have a number of benefits. Under a prospective payment plan, a healthcare provider will always receive the same payment for providing the same specific type of treatment. While these rates might change over time because of factors such as inflation, they are not adjusted to accommodate individual patients. Prospective payment plans Prospective payment plans work by assigning a fixed payment rate to specific treatments.

Each option comes with its own set of benefits and drawbacks. There are two primary types of payment plans in our healthcare system: prospective and retrospective.

In the U.S., cost tends to play a role in the way patients receive medical care.

Retroactive vs retrospective