Under the Knife: Public, Private Insurers Cut Into Fee-For-Service Health Plan

by Mark Friedman  on Monday, Apr. 9, 2012 12:00 am  

Public and private insurers are cutting into fee-for-service business plans.

Allison said that more procedures could be added to the list of six starting next year.


Wroten, from the Arkansas Medical Society, said he doesn’t think the fee-for-service model has to change.

“The fee-for-service model is not the problem,” he said. “The problem is health care is expensive.”

He said Medicaid is trying to use doctors to control health care costs.

“And that’s fine, but physicians only have control over a limited amount of those other health care dollars,” such as what happens in a nursing home, he said.

Miller, of the Center of Health Care Quality, said moving away from a fee-for-service model to one based on patient outcomes should provide for more flexibility in the way health care is delivered.

Under the fee-for-service model, for example, a doctor gets paid for seeing a patient in his office, when it might be more efficient to call the patient, Miller said.

“If you wonder why you can’t get your doctor on the phone, it’s because they don’t get paid for that,” he said. But under the system based on efficient care, the doctor has an incentive to use a better phone system or email to communicate with patients, he said.

The University of Arkansas for Med-ical Sciences in Little Rock is working on meeting the new requirements. UAMS’ Chancellor Dan Rahn said the new payment model is a “big change” and UAMS is working on a blueprint on how it will work.

“We as an organization need to decide how the payments get divided and how we will reduce health system expenditures,” he said, “while at the same time operating in a way that provides us with enough revenue to pay the physicians and cover our operating costs in the hospital.”

Rahn said that he thinks having families, physicians, other providers and payers all work together will make the health care industry more efficient and the costs lower.

“The first thing we need to do is try to stem the rate of rise in health care expense,” Rahn said. “Then, we could do the next thing, which might be to bring down the overall expenses.”



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