Cost-for-service ( FFS ) is a payment model in which services are not described and paid separately. In health care, this provides an incentive for doctors to provide more care because the payment depends on the quantity of care, rather than the quality of care. However, evidence of the effectiveness of performance payments in improving the quality of health care varies, without conclusive proof that these programs succeed or fail. Similarly, when patients are sheltered from payments (sharing of costs) by health insurance coverage, they are given an incentive to welcome any medical services that may be beneficial. SL is the dominant method of payment of doctors in the United States, and increases costs, reduces the efficiency of integrated care, and various reform efforts have been tried, recommended or initiated to reduce its impact (such as moving to bundled payments and capitation). In capitation, doctors are not given incentives to perform procedures, including those required, because they are not paid extra to do that. In the Japanese health care system, FFS is mixed with a national pricing mechanism (full paying rate setting) to control costs.
Video Fee-for-service
Health care
In health insurance and health care industries, FFS occurs when doctors and other health care providers receive fees for any service such as office visits, tests, procedures, or other health care services. Payments are issued only after service is provided. SL is inflation by raising health care costs.
This creates a potential financial conflict of interest with the patient, because it provides overutilization incentives, - care with inadequate volume or excessive cost.
It does not give doctors incentives to withhold services. If the bill is paid under FFS by a third party, the patient (along with the doctor) does not have an incentive to consider medical expenses. Patients can welcome services under third-party payers because "when people are isolated from the cost of the desired product or service, they use more."
Evidence suggests primary care physicians who are paid under the FFS model tend to treat patients with more procedures than those paid under capitation or salary. FFS provides incentives to primary care physicians to invest in radiology clinics and self-referrals doctors to generate income.
Private practice doctors and small group practice are particularly vulnerable to refusal of reimbursement for patient care by government and payer third parties. Increased regulatory demands, such as the purchase and adoption of expensive electronic medical record systems, and increased vigilance by government agencies tasked with identifying and recovering Medicare's fraud and abuse, have swelled overhead and cut income.
While most practices have given up on the need to see more patients and improve SL procedures to sustain revenue, more doctors are looking for alternative practice models as a better solution. In addition to value-based replacement models, such as pay-to-performance programs and responsible care organizations, there is a growing interest in the concierge practice model and direct payments. When patients have greater access to physicians and doctors they have more time to spend with patients, utilizing services such as imaging and decreased testing.
FFS is a barrier to coordinated care, or integrated care, exemplified by the Mayo Clinic, as it rewards individual doctors for separate treatments. FFS also does not pay service providers to pay attention to the most expensive patients, who can benefit from interventions such as phone calls that can make some hospital admissions and 911 calls unnecessary. In the US, SL is the primary payment method. Executives regret changes in managed care, believing that the SLS is transforming "diligent and productivity-oriented physicians into satisfied and salaried employees." Public practitioners have less autonomy after switching from the FFS model to integrated care. Patients, when moving from the FFS model, may have limited physician options, as was done in the Dutch attempt to move to coordinated care.
When doctors can not bill for a service, it serves as a disincentive to do the service if there are other billing options. Electronic referrals, when a specialist evaluates medical data (such as laboratory tests or photographs) to diagnose patients rather than seeing patients directly, will often improve the quality of health care and lower costs. However, "in the context of personal cost-for-service, the loss of specialist income is a strong deterrent to e-referrals, a barrier that may be overcome if the health plan replaces the specialist for the time spent handling electronic referrals."
In Canada, the proportion of services billed under the FFS from 1990 to 2010 shifted substantially. Lack of care is paid for patients under 55 while for those over 65, payments for diagnostic services are rising sharply.
Maps Fee-for-service
Reform
Moving from FFS to performance payments introduces quality and efficiency incentives, not just prize quantities. In addition to the Mayo Clinic, other health care systems serve as a coordinated/integrated care alternative to the FFS model such as Geisinger South Central Pennsylvania Health System which doctors, residents and associates are paid salaries with potential bonuses depending on patient performance, Intermountain Healthcare Utah, Cleveland Clinic, and Kaiser Permanente. Coordinated care can result in cost savings of about 50% when compared to SL programs, but long-term savings for payers should not exceed 40%.
An objective of a responsible care organization (ACO), part of the 2010 Patient Protection and Affordable Care Act (PPACA), is to move from SLS to integrated care. ACO, however, fits mostly into the SL framework and does not leave the model completely. The approach suggests policymakers seek to avoid provoking public protests, as is the case with care managed in the 1990s by providing incentives to service providers to provide inadequate care. PPACA aims to move Medicare from FFS and then other payers. A Swiss study showed doctors wanted a significant salary increase to leave the SL for an integrated care model, and patients wanted a lower premium before they chose one, a result that suggests difficulty for the purpose of PPACA
In China, where FFS produces expensive, inefficient, and low-quality health care with the degeneration of medical ethics, reform has begun to realign health care providers incentives. Experiments with new payment models are underway and recommendations include strengthening medical ethics, changing provider's profit motives, and, if hospitals retain their profit motives, separating doctors from profit objectives.
In the US, the 1990 move from FFS to pure capitation triggered reactions from patients and healthcare providers. Pure capitation pays only a set of costs per patient, regardless of illness, giving the physician an incentive to avoid the most expensive patient. To avoid SL traps and pure capitation, payment model episodes of care and comprehensive care payments have been proposed. In 2009, Massachusetts, with the highest health care costs in the country, has a group of ten health care experts working under the legislative mandate to come up with a plan to tackle the costs (Massachusetts Reform Commission); they unanimously concluded the FFS model should be removed. Their plans include moving from FFS to a global payout system that has similarities with a large capital system. No US state is trying to get rid of FFS.
Medicare in the US is a SL program. Medicare's Medicare Advisory Commission (MedPAC), in its mid-2011 report to Congress, called for a mechanism for Medicare beneficiaries to have a disincentive to undergo unnecessary treatment.
Patent
The US Patent and Trademark Office operates under the FFS model.
Real estate
In real estate, fee-for-service models paying brokers provide an alternative to paying commissions. In the service fee pricing model, the broker may charge a fee to indicate travel or other services.
See also
- Payments in groups
- Preferred provider organization
- Health maintenance organizations
References
Source of the article : Wikipedia
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