Fee-for-service
Fee-for-service
Fee-for-service (pronunciation: fee-for-ser-vice) is a payment model where services are unbundled and paid for separately. In healthcare, it gives an incentive for physicians to provide more treatments because payment is dependent on the quantity of care, rather than quality of care.
Etymology
The term "fee-for-service" originated in the United States and is believed to have been in use since the early 20th century. It is derived from the words "fee", "for", and "service", which literally means a charge or payment for a service.
Definition
In a fee-for-service system, healthcare providers, such as doctors and hospitals, receive a fee for each service such as medical tests, surgeries, or other treatments. The fee-for-service model contrasts with capitation, salary, and value-based payment models.
Related Terms
- Capitation: A payment arrangement for health care service providers where they receive a set amount for each enrolled person assigned to them, per period of time, whether or not that person seeks care.
- Salary: A fixed regular payment, typically paid on a monthly or biweekly basis but often expressed as an annual sum, made by an employer to an employee, especially a professional or white-collar worker.
- Value-based payment: A strategy used by purchasers to promote quality and value of health care services. The goal is to shift from pure volume-based payment, as exemplified by fee-for-service payments, to payments that are more closely related to outcomes.
See Also
External links
- Medical encyclopedia article on Fee-for-service
- Wikipedia's article - Fee-for-service
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