Types of Health Care Fee Service in the United States

Types of Health Care Fee Service in the United States


Americans use various modes of payment for healthcare services with the fee-for-service system being the most widespread. However, fee-for-service is seen as a major hindrance to delivery of better medical services since it rewards quantity instead of quality. ‘Fixed annual budgets’ is another U.S. payment system for healthcare services. Nevertheless, this payment mode is not the ultimate solution because the budgets do not cover possible patients’ needs during a budget year. Hence, patients using this payment model have to wait for a while to receive treatment for non-emergency cases that may occur before the lapse of their fixed annual budget plans (Porter and Kaplan). Therefore, value-based reimbursement, which includes bundled and capitation payment modes, happens to be the best option. In a bundled system, a healthcare organization receives a single payment to provide any care that a patient may require for the treatment of a specific medical condition. In capitation, healthcare organizations get fixed payments every year for each covered person.

Future Public Health Measures

Between capitation and bundled payment, the latter is the better option. Just like fee-for-service model, capitation leads to unhealthy competition, leaving some health needs of individual patients and the general population unattended. Therefore, major players in USA, including individuals, healthcare providers, the government, and insurance companies should adopt bundled payment system. Since this model holds healthcare providers accountable for the impact of their treatment on patients’ health, it might be the best approach to ensure that patients get value for their money. Moreover, bundled payments minimize the number of health providers treating every condition (Porter and Kaplan). Consequently, the existing ones will be stronger and face less unhealthy competition, leading to a better healthcare.


Work Cited

Porter, Michael, and Robert Kaplan. “How to Pay for Health Care.” Harvard Business Review, hbr.org/2016/07/how-to-pay-for-health-care. Accessed 2 June 2017.