Is the Fee-for-Service Physician Payment Model Doomed?

CORONADO, CALIF.—With the healthcare landscape morphing on a near-daily basis, panelists gathered at the Triological Society Combined Sections Meeting to discuss the merits and disadvantages of the fee-for-service payment model, as well as its role in the future of healthcare in the U.S.

Members of the group touched on the importance of preserving their ability to provide patient care, the “outlier” physicians who bend or break rules for profit, and the importance of spreading awareness that a large number of factors contribute to high healthcare costs in the U.S. They tended to agree that at least some form of fee for service will continue to exist, largely because it is a good system when compared with others.

The panel was moderated by Fred Owens, MD, of the Owens Ear Clinic in Texas and incoming president of the Triological Society. Panelists were Sigsbee Duck, MD, of the Memorial Hospital Otolaryngology Clinic in Rock Springs, Wy.; Susan Cordes, MD, of Ukiah Valley Medical Center in Ukiah, Calif.; David Edelstein, MD, chief of the otolaryngology service at Manhattan Eye, Ear and Throat Institute in New York City; and Michael Setzen, MD, a solo practitioner in Great Neck, N.Y.

Fred Owens, MD

Dr. Owens said the criticism of physician billing has been growing but that patients often demand the kind of care that they’re given. “[Critics] complain a lot because we order studies,” he said. “But I would contend that it’s going to be very difficult to get patients to let us take care of them without getting studies done to try to make a diagnosis. And we’re probably the leading country in building technology, so technology usually comes first to us and then to other countries.”

Dr. Cordes listed a wide range of benefits of a fee for service system: familiarity, the simplicity of paying for what you get, promoting a physician work ethic, and allowing for physician autonomy and flexibility in lifestyle and income and in the types of procedures and practice they want to perform. “Ultimately, I believe that fee-for-service could actually decrease healthcare costs because it is like the market where, [when] you need something, you have to pay for it,” she said. “If patients have a little skin in the game on everything, then they will be better consumers and make better choices and participate more in that decision, and that could help hold costs down.”

Cost, Volume, Value

Dr. Setzen said he thinks that fee for service that involves quality-based and value-based measures would be a fair and reasonable approach to care. According to Dr. Duck, if appropriate and meaningful quality and value measures were added to fee for service, there would be a method by which to prove that what you’re doing is working. “That’s the big downfall with fee for service, according to all the papers and studies that are published,” he said, adding that most of the articles about why fee for service isn’t a good system are written by non-physicians.