Class, discuss the differences between second-party payment and third-party payment. What led to the creation of the third-party payment system?
Ans 1)Third-Party Payment a type of coverage wherein the payer (3rd party) makes payment to a provider (2nd party) to provide service to the patient in question (1st party). On the other hand, majority of the forms of insurance comprise of a 2-party agreement. The 1st party (the client) purchases a plan from the 2nd party (i. e the insurer). When the insured sustains a ‘loss’ the 2ndparty pays a claim to the insured.In a two-party payment system there is direct accountability which is absent in the 3rd-party payment system.
Ans 2)The Third-party payment system was initiated by BlueCross organization in the 1930s. BlueCross was started by hospitals who were worried about their financial situations in the Depression period. The sample was introduced by Baylor Hospital ( Dallas) in 1929, and thereafter used by other hospitals around the nation.