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The pitfalls of fee-for-service healthcare

Has fee-for-service medicine and healthcare more broadly passed its use by date?

“Yes and no” is the suggestion of this brief report from The Canadian Health Services Research Foundation, published as part of its myth-busting series.

The commonly held belief that most doctors prefer fee-for-service is a myth, it says. While the report is framed very much within the Canadian context, many of its arguments sound very familiar.

In fact, I’ve spent much of the morning on the phone interviewing various people about the barriers to recruiting doctors into rural and remote areas, and more than a few nominated the fee-for-service system as unhelpful.

The report doesn’t totally can fee-for-service, however. The main point is that flexible systems are needed to accommodate various situations and needs – not a one-size-fit-all approach. And isn’t that a useful point, more broadly…

Here is the conclusion:

“The modern physician is moving toward an alternate form of payment plan. However, it would be premature to sound the death knell of fee-for-service; when respondents to the 2007 National Physician Survey were asked to define their ideal blended payment plan, 82% included a fee-for-service component. Some payers require fee-for-service “shadow billing” in order to monitor changes in cost and service provision between the fee-for-service model and newer, alternative models of payment.

A decade-old green paper from the College of Family Physicians of Canada argues that flexibility in payment models is imperative: “A one-size-fits-all approach is a straightjacket for both the patient and the physician.” Blended systems offer a range of payment and policy options, each of which will have varying attractiveness to physicians, politicians and patients. The challenge is to determine which models deliver the greatest overall benefits – to patients, taxpayers and healthcare providers.”

I’m not sure that we’ve really had a useful public debate about this issue in Australia. My sense, and maybe I’m wrong, is that it’s been kept carefully to one side during the general health reform debate. Too hot to handle, perhaps?

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  2. By fee service on March 29, 2010 at 4:46 pm

    ...] incur a 5% up charge) Adoptive Family Name. If adoptive parent(s) names different than on card …The pitfalls of fee-for-service healthcare CroakeyHas fee-for-service medicine and healthcare more broadly passed its use by date? … The commonly [...

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