Issuance of Discounts to Reduce the Cost of Health Abstract

Issuanceof Discounts to Reduce the Cost of Health


Discountsissued to patients in the health care industry are intended to lowerthe cost of care by reducing the amount that patients pay out ofpocket. These discounts include the membership discount, time ofservice discount, hardship discount, and pre-payment discount. Thepre-payment is the most appropriate type of discount from theperspective of a health care organization. The pre-payment programsallow the health care organizations to receive funds before they candeliver health care.

Issuanceof Discounts to Reduce the Cost of Health

Thestakeholders in the health care sector use different measures tocontain the cost of health, one of them being the issuance ofdiscounts to clients. These discounts are not health insurance, butthey are programs that empower health care providers to givediscounts to patients with the objective of lowering theout-of-pocket cost of care (Consumer Protection Program, 2015). Thesetypes of discount can be grouped into four categories. The first typeof discount is referred to as the membership discount, which targetmembers who incur charges from a chiropractic provider. Membership tothis program is maintained by an organization with a national orstatewide scope, but only a small number of chiropractors areconsidered (Commonwealth of Massachusetts, 2015).

Secondly,the time of service (TOS) type of discount target clients who paytheir medical charges in full at the time they receive thoseservices. All patients benefit from TOS since it is offered on thenon-discriminatory basis. However, the amount of discount givenshould be clearly indicated in receipts, bills, and accountstatements (Commonwealth of Massachusetts, 2015). Patients who wishto make an insurance claim are also required to submit receipts thatreflect the discounted price that was offered.

Third,hardship discount includes the issue of a waiver to patients who areundergoing financial hardships. However, the waiver is only issuedwhen it is not part of an advertisement and the license giving thediscount does not waive coinsurance in a routine way (Commonwealth ofMassachusetts, 2015).

Lastly,the pre-payment discount allows the patient to select health carepackages that are perceived to cost less than the price they wouldhave paid in case they purchase services individually (Sack, 2014).Patients pay monthly or annual fee out of their pocket.

Inconclusion, all discounts reduce the cost of care, but thepre-payment discount can be more beneficial to health careorganizations. This is because the pre-paid funds allow the healthcare organizations to avoid illiquidity and plan for the delivery ofhealth care services in advance.


Commonwealthof Massachusetts (2015). Consumer affairs and business regulation.Commonwealthof Massachusetts.Retrieved October 26, 2015, from

ConsumerProtection Program (2015). Discounthealth care programs resource page.Austin, TX: CPP.

Sack,M. (2014). Regulating prepaid payment plans Robert Baritz, DCchairman Massachusetts Board of Registration of Chiropractors 1.SlidePlayer.Com.Retrieved October 26, 2015, from