Fee for Service Vs Value-Based Care: Financial and Clinical Impact Compared

Doctors get paid two ways in healthcare. Fee for Service Vs Value-based Care. One pays for each service done, the other pays for keeping patients healthy.

Fee-for-service pays doctors for every visit, test, or procedure. Blood test? Payment. Surgery? Payment. Office visit? Separate payment.

Do more procedures, get more money. Most doctors work this way today.

What is Value-Based Care?

Value-based care pays doctors when patients get better results. No payment per test or procedure. Doctors get bonuses when patients stay healthy.

Keep diabetic patients out of the hospital? Bonus. Help heart patients avoid complications? Extra pay. Value-based care vs fee-for-service focuses on outcomes over volume.

Financial Impact: Comparing Revenue Models 

The payment methods work differently:

Fee-for-Service Money

• More procedures = more money
• Every test pays something
• Sicker patients bring higher bills
• Doctors don't lose money for bad outcomes

Value-Based Care Money

• Healthy patients = higher pay
• Doctors share costs with insurance
• Prevention pays better than fixing problems
• Bad results can reduce payments

Clinical Impact: How Payment Changes Care

Payment method changes how doctors practice.

Fee-for-service can push extra testing. Every test pays money. Some doctors order tests that patients don’t really need. More tests mean more billing.

Value-based care pays doctors to keep people healthy. Catch diabetes early. Stop heart problems before they happen. This means:

• Better care for chronic diseases
• Fewer trips to the hospital
• More prevention checkups
• Doctors coordinate care better

Cost Management: Which Model Saves Money?

Value-based care cuts costs by preventing problems. Pay doctors to stop expensive emergencies before they happen.

Fee-for-service costs more because:

• Doctors may order extra tests
• The same tests get repeated
• Specialists don't coordinate
• Treat problems instead of preventing them

Patient Experience: What Changes for Patients

Value-based care means your doctors work as a team. They share information and coordinate your care.

Fee-for-service splits your care up. The heart doctor doesn't coordinate with the diabetes doctor. The knee specialist skips both. You're on your own to coordinate.

Implementation Problems

Both systems have issues. Fee-for-service creates billing headaches. Value-based care requires tracking lots of patient information.

Doctors need tools that track patient health, measure quality, and help coordinate care.

Takeaway

Healthcare is switching from fee-for-service to value-based care. Fee-for-service pays predictably but encourages unnecessary procedures. Value-based care pays better over time by keeping patients healthy.

Doctors switching payment models need tools to track patient health and measure quality. Persivia builds healthcare platforms for both payment types. We help track patient outcomes and coordinate care between doctors.

Make the switch to value-based care with Persivia's platforms. Track quality scores, manage patient health, and coordinate care teams.

Explore Persivia's Healthcare Platforms.