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Wednesday, April 28, 2010

What is the problem with "fee for service"?

When I first started to the hear the mantra "the problem is fee for service" in the discussion of health care reform, I couldn't quite wrap my head around it.  What exactly did this mean?  I had worked for an HMO, received a salary, and now that I no longer work for a salary, and make money based on the amount of work I do, I feel more free to practice the way that works best for my patients, me, my family and my friends. Sure, higher performing systems like the Mayo Clinic work with salaried physicians, but doesn't that take away those physicians' incentives to provide the best service?

The problem with fee for service is that the services for which I charge a fee are not the services which are of value to my patients.  What patients want, mostly, is good health with a minimum of time, effort and money spent to get it. What I charge them for is face to face time in the office.  What I spend most of my time doing is solving problems in a context that is different from face to face time with my patients, and I am not usually paid for that at all.  So the face to face charges subsidize the huge amount of problem solving.

The problem, then, is fee for "service". The problem is the definition of service.  In order to be focused on giving what patients actually want, it would be very helpful to be paid according to the effort and efficient provision of those services.

Perhaps he rest of you had already figured this out, but I am a little bit slow sometimes.  This does actually mean that the whole way of providing care and compensating for it needs to be re-vamped to adhere to service that is actually useful, not making work, looking busy, complicating issues in order to appear more competent.

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