Fee-For-Service VS Value-Based Care

As a physician or any healthcare professional for that matter, it’s important that you know where your salary is coming from. Simple enough, right? Patients pay for the care you provide, and that payment then goes towards your salary. Well, it isn’t as easy as it sounds. Most healthcare facilities will have two main options to receive payment from insurance providers. As the healthcare landscape continues to change, the fee-for-service VS value-based care debate will continue on. There have been tremendous reforms in healthcare that have the industry revisiting the issue of how health care providers are paid. The goal is to emphasize better quality at reasonable costs. Below we’ll take a look at both of these forms of reinforcement and try to tackle the fee-for-service VS value-based care issue.

Fee-For-Service VS Value-Based Care


Historically, healthcare providers used fee-for-service reimbursement for their facilities. Under this systems, billing and payments are determined based on the procedures performed by a doctor as opposed to the outcome achieved through medical care. In the fee-for-service VS value-based care debate; this was often the most beneficial for patients, at least initially.

The idea was that patients wouldn’t need to pay for any procedure or test that they deem unnecessary. In niche areas across other industries, such as cosmetic surgery, dentistry, law and veterinary care, the fee-for-service model works and actually reduces cost increases through competition. In fact, the cost of Lasik surgery has gone down over the years significantly after the model was implemented.

fee-for-service vs value-based care

However, many physicians are often feeling the pressure to ancillary testing and optional procedures simply because they need to bill these insurance companies and make enough money to stay open. Another major factor in the fee-for-service VS value-based care debate is the outcome of the patient. One of the biggest issues that many have with fee-for-service reimbursement is that it doesn’t matter the outcome of the tests or procedures. If a procedure or treatment doesn’t work, the insurance company or patient themselves could be left with the bill.

Value-Based Care

As the healthcare landscape continues to evolve, value-based care is quickly becoming a front-runner when it comes to healthcare reimbursement. value-based care is assessed, and rewarded, based on the value practices and procedures offer patients. Instead of taking a numbers-based look at the services performed, value-based healthcare delves deeper, providing payments based on successful outcomes and healthy patients rather than the number of procedures used to get there.

Many physicians enjoy this option because they no longer have to worry about pushing for more tests and procedures simply because they need to meet their financial quota. Instead, they can focus solely on providing the best possible care that results in the best possible outcome.

Patients certainly enjoy this option because they will only be forced to pay for procedures and treatment if it is deemed successful. These new models of care and reimbursement are data driven to measure the true costs of healthcare delivery, not just the costs of running a department. The approach examines a patient’s condition over the full care cycle, including probable further treatment, to calculate costs, not just specialized fees. And the aim is to garner the most value per dollar to the patient, not to perform the most procedures.

It seems like the only group that might not benefit from the fee-for-service VS value-based care is the insurance companies. They will still be footing the bill most of the time, so it will be interesting to see if they have any pushback on these reimbursement programs.

Final Thoughts

It seems like in the fee-for-service VS value-based care debate; value-based care seems to be taking over. However, no two practices are alike, so it’s always a good idea to think about which type of reimbursement program is right for you. If you’d like to comment on the fee-for-service VS value-based care, feel free to let us know below!

Author: Troy Diffenderfer

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