The Commonality Between Value-Based Purchasing (VBP) and Pay-For Performance (P4P)

question 3

Multiple Choice

The commonality between Value-Based Purchasing (VBP) and Pay-for Performance (P4P) is:

• A) VBP and P4P have the same setting, such as private health plans.
• B) VBP and P4P were both initiated in 2004.
• C) VBP and P4P focus on awards or penalties and the mechanism of payment.
• D) VBP and P4P integrates information on quality with cost data.

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Definitions:

Profit-maximizing

The process of making business decisions that aim to increase the difference between total revenues and total costs to the highest possible level.

Marginal Revenue Product

The additional revenue generated by employing one more unit of a factor, such as labor or capital.

Marginal Revenue Product

The additional revenue generated from using one more unit of an input in the production process.

Wage Rate

The amount of compensation a worker receives per unit time or per unit of output, often expressed per hour or piece.