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Fee For Service Model For Health Care Essay

1259 Words6 Pages

What should be the nation’s healthcare system be like? Everyone would want the healthcare system to be reliable, accessible, and most importantly concerned about health – not dollars. Healthcare costs are extremely high and have been growing for quite some time. An article from the National Library of Medicine, published in 1984 records, “Health care spending in the United States more than tripled between 1972 and 1982, increasing from $94 billion to $322 billion.” Data reported from the CMS (Centers for Medicare and Medicaid Services) reported, “The 2021 National Health Expenditures (NHE) Report found that U.S. health care spending grew 2.7% to reach $4.3 trillion in 2021.” In 2022 Medicare was budgeted 16.4%, which was 1.5 trillion, and …show more content…

The Health Care Payment Learning & Action Network has done work to standardize four different types of payment models to synchronize the nomenclature. Category one is Fee-For-Service. Category two is Fee-for-Service payments with a link to quality and value. Category three is an alternative payment based on fee for service with either shared savings or shared savings and risk. Lastly, category four is a population-based payment. Categories two through four are considered different types of value based, while category one is solely fee for service. (A 50-State Review of Value-Based Care and Payment Innovation, 2019). With each of these different models there are variations of shared gain or loss, risk or reward. Someone is taking all the risk, the provider or patient, or there is shared risk and shared gain. With a solely fee-for-service model, the patient is taking on the risk, there is no loss for the provider if the patient does not have a quality outcome (Terms to Know, 2023). For a category four value-based care, population-based payment, the provider takes all of the risk (Terms to Know, 2023). For example, the provider is given a certain amount to care for the patient, if the patient does not become well, the responsibility relies on the provider to cover any extra cost (Terms to Know, 2023). However, if the patient gets better with less than the fixed amount of resources, the provider gets to keeps the leftover money. This is to motivate the provider to get the patient to return to health quicker and with less costs associated so that they can receive a profit. There are other types of payments models between a complete fee for service or a complete value-based care model such as bundled payments, capitated payments, shared risk - downside risk, and upside risk - upside gainsharing (Terms to Know, 2023). Bundled payments is where a provider gets a sum of money and pays out of

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