Question

What is a fee-for-service payment system?

1) A payment system where the provider is paid a fixed fee for each service given
2) A payment system where the provider is paid a percentage of the total cost of services given
3) A payment system where the provider is paid for each service given
4) A payment system where the provider is paid a lump sum amount for a set period of time

Answer 1

The correct answer is option 3. In a fee-for-service payment system, medical care providers are paid according to the individual services they provide, and they receive reimbursement based on the cost of each service. This is different from health maintenance organizations, where providers receive a fixed payment per person enrolled in the plan.

Step-by-step explanation:

In a fee-for-service payment system, medical care providers are paid according to the services they provide. This means that they receive reimbursement based on the cost of each individual service they deliver. It is different from health maintenance organizations (HMOs), where providers are paid a fixed amount per person enrolled in the plan, regardless of the number of services provided.

For example, in a fee-for-service system, if a doctor performs a surgery, they will receive a payment based on the cost of that surgery. If they also perform additional tests or scans, they will receive separate payments for each of those services. The more services they provide, the higher their overall payment.

Overall, a fee-for-service payment system incentivizes medical care providers to deliver more services, as they receive payment for each individual service. This can lead to increased healthcare spending and potential overutilization of services.