In the context of APMs, what does the term "cost-sharing" refer to?

In the context of Alternative Payment Models (APMs), the term "cost-sharing" specifically refers to the distribution of costs between patients and insurance companies. This concept is an essential component of healthcare financing, as it outlines how financial responsibilities are divided. Cost-sharing mechanisms, such as copayments, deductibles, and coinsurance, determine the amount a patient will pay out of pocket for healthcare services, while the insurance provider covers the remaining costs.

This approach incentivizes patients to be more engaged in their healthcare decisions, as their financial contribution can influence their choices regarding care. By striking a balance between patient out-of-pocket expenses and insurance coverage, the goal of cost-sharing is also to promote the sustainable funding of healthcare systems.

In contrast, other choices suggest scenarios that do not accurately represent the traditional understanding of cost-sharing in APMs. For example, sharing financial responsibilities among healthcare providers focuses more on collaboration among providers rather than the patient-insurer relationship. Additionally, fully eliminating patient expenses or placing the burden of all operational costs on providers deviates from the fundamental principles of financial responsibility and affordability in healthcare.