Fee For Service vs. Value Based Care: What's The Difference?
In the healthcare space, there are two primary business models: Fee for Service (FFS) and Value Based Care (VBC). Each model has its own set of implications for patients, providers, and payers. Understanding the difference between the two models is crucial for navigating the modern healthcare system.
Fee For Service
Fee for Service is when providers are paid for each service they deliver to a patient. Providers are incentivized to deliver more services, as each service requires a payment. This business model has been the traditional healthcare business model for years but has recently been facing criticism due to its potentially incentivizing unnecessary or low-value services, which leads to inflated healthcare costs.
In a Fee for Service system, healthcare providers may order additional tests, procedures, or consultations to increase their revenue, even if the services do not benefit the patient's health outcomes. This can lead to overuse of healthcare services, which not only increases costs, but also exposes patients to unnecessary risks.
One of the main criticisms of Fee for Service is its lack of focus on patient outcomes. Since providers are reimbursed based on the volume of services provided rather than the quality of care delivered, there is little incentive to prioritize preventive care.
Value Based Care
Compared to Fee for Service, Value Based Care emphasizes the quality and outcomes of healthcare services rather than the quantity. Under this model, providers are rewarded for delivering quality care that improves patient health outcomes and reduces overall costs.
Value Based Care aims to align incentives among payers, providers, and patients to promote more efficient healthcare services. In a Value Based Care system, providers are reimbursed based on metrics such as patient satisfaction, health outcomes, and overall cost savings. This reimbursement structure incentivizes providers to focus on preventive care.
Value Based Care offers a promising alternative that pays providers to deliver high quality, cost-effective care that prioritizes patient outcomes. As healthcare systems continue to evolve, the shift towards Value Based Care represents a much-needed transformation in how healthcare is delivered, with the end goal of improving patient outcomes and reducing overall healthcare costs.
Interested in Learning More?
We would love to hear from you! Please reach out to us