Final answer:
In a fee-for-service system, providers are paid based on the cost of services. Prospective payment systems used by third-party payers like Medicare and Medicaid help control costs and incentivize efficiency. Option b.
Step-by-step explanation:
In a fee-for-service health financing system, medical care providers receive reimbursement based on the cost of services they provide. Prospective payment systems, such as those used by third-party payers like Medicare and Medicaid, provide fixed payments to medical providers based on predetermined rates for specific procedures or diagnoses.
This system can help reduce costs compared to fee-for-service because it provides incentives for providers to be more efficient and avoid unnecessary services. By setting predetermined payment amounts, third-party payers can control costs and encourage the appropriate use of medical services.
Therefore, the statement in question is false (b). Prospective payment does allow third-party payers to reduce costs compared to fee-for-service.