By Healthcare Brew Staff
less than 3 min read
Definition:
Fee-for-service is one of two models insurers use to determine how much to pay providers. Under this model, which is also thought of as the “traditional” option, providers are paid for each individual service they perform, unlike how they’re paid under the newer value-based care model.
Why does the industry want to move away from fee-for-service?
Like many areas of healthcare, the tides turned against fee-for-service during the Covid-19 pandemic—particularly at primary care facilities, which had previously benefitted from this model. So when patients changed how they sought out healthcare services during the pandemic, facilities became at risk of closing.
As a result, many providers started to switch business models to stay afloat.
How was fee-for-service impacted by the pandemic?
Cue the concierge and direct primary care (DPC) models.
A concierge model allows providers to charge patients an annual fee to become members, where they’ll receive 24/7 access to providers and personalized care, all while not feeling limited by an insurance plan. Prices for membership can be as high as $10,000, but the packages provide perks like being able to reach a provider at any time of the day and same-day appointments.
Direct primary care, on the other hand, is when facilities don’t accept insurance. Patients pay a lower monthly fee (usually $50 to a few hundred dollars) for direct access to a primary care provider and unlimited visits. But patients need to keep their insurance for other services outside primary care.
