While many people blame the fee for service system for many of the problems in the health care system there is a reason why the system developed in the first place and remains the primary payment method in many portions of the country. Fundamentally, we don’t understand what quality care is. This controversial statement doesn’t imply that we don’t know what substandard care is, we can certainly agree on never events, but actually reducing most medicine to an algorithm, Watson not withstanding, is beyond our reach.
For most goods and services, only understanding the outcome is fine. We don’t need to completely understand how something works as long as we can repeat the outcome, but the goal in medicine is not to do something but ideally not doing something. We want health which in many cases is the absence of care not a specific service. How can someone outside the doctor patient relationship understand if lack of activity is a really good outcome because a patient never needs a doctor vs. a really bad outcome because the patient can’t see the doctor?
Fee-for-service provides a remarkably effective solution for this problem. A provider is paid for what they do. If a provider does nothing then the provider is paid nothing. The “natural” incentive for patients to avoid care should limit unnecessary care. But today’s patient’s don’t have an aversion but an affinity for care. As patients we think there is a solution to all of our ails and seek out the cure. Any payment reform has to deal with this issue, patient lead care vs. provider care. Fee-for-service may not hinder this care seeking but when expanded to patients, through co-pays or deductibles, it at least gives everyone a little skin in the game.
Patients not only want care but choice. What happens when a specific group of providers have been paid for an outcome, a healthy knee following an ACL surgery, and the patient wants to substitute the physical therapist? Is it the patient responsibility to pay for the physical therapy? Once again fee-for-service makes this system easy to handle. Each member of the group is paid for the services that are provided. Patients can slice and dice care seeking their definition of health.
Incentives and choice make for a power inertia built into the present system. Newer payment models will need provide a convincing reason for behavior change from both provider and the patient. Fee-for-service may induce bad incentives in providers but payment reforms also need to take realistic views of what patients get out of the current fee-for-service system.