Fee-for-service
Fee-for-service (FFS) is a payment model where services are unbundled and paid for separately. In health care, it gives an incentive for physicians to provide more treatments because payment is dependent on the quantity of care, rather than quality of care. However evidence of the effectiveness of FFS in improving health care quality is mixed, without conclusive proof that these programs either succeed or fail. Similarly, when patients are shielded from paying (cost-sharing) by health insurance coverage, they are incentivized to welcome any medical service that might do some good. Fee-for-services raises costs, and discourages the efficiencies of integrated care. A variety of reform efforts have been attempted, recommended, or initiated to reduce its influence (such as moving towards bundled payments and capitation). In capitation, physicians are not incentivized to perform procedures, including necessary ones, because they are not paid anything extra for performing them. FFS is the dominant physician payment method in the United States. In the Japanese health care system, FFS is mixed with a nationwide price setting mechanism (all-payer rate setting) to control costs. Health care In the health insurance and the health care industries, FFS occurs if doctors and other health care providers receive a fee for each service such as an office visit, test, procedure, or other health care service. Payments are issued only after the services are provided. FFS is potentially inflationary by raising health care costs. FFS creates a potential financial conflict of interest with patients, as it incentivizes overutilization,—treatments with an inappropriately excessive volume or cost. FFS does not incentivize physicians to withhold services. If bills are paid under FFS by a third party, patients (along with doctors) have no incentive to consider the cost of treatment. Patients can welcome services under third-party payers because "when people are insulated from the cost of a desirable product or service, they use more." Evidence suggests primary care physicians paid under a FFS model tend to treat patients with more procedures than those paid under capitation or a salary. FFS incentivizes primary care physicians to invest in radiology clinics and perform physician self-referral to generate income. While most practices have succumbed to the need to see more patients and increase FFS procedures to maintain revenue, more physicians are looking to alternate practice models as a better solution. In addition to value-based reimbursement models, such as pay-for-performance programs and accountable care organizations, there is a resurgence of interest in concierge and direct-pay practice models. When patients have greater access to their physicians and physicians have more time to spend with patients, utilization of services such as imaging and testing declines. FFS is a barrier to coordinated care, or integrated care, exemplified by the Mayo Clinic, because it rewards individual clinicians for performing separate treatments. FFS also does not pay providers to pay attention to the most costly patients, which could benefit from interventions such as phone calls that can make some hospital stays and 911 calls unnecessary. In the US, FFS is the main payment method.