Contrary to what the HHS has stated, the fee-for-service payment model has nothing to do with abuse or wasteful spending. This model has been the standard method of payment for a wide range of goods and services from the beginning of time, including medical services since colonial days. The real culprit behind medical inflation is the third party system. Major medical plans have been subsidized since WWII, but since 1960 the system has moved away from true insurance to prepaid care. Having “someone else” paying for your care leads to overuse and inflation of costs. This inflation leads to higher taxes or insurance premiums. The price controls of third party payers also drive up spending, and the price for a medical procedure has nothing to do with supply and demand. A free market in medical care does exist outside the third-party system, such as concierge and direct pay practices. Competition and price transparency lead to drops in pricing and improved quality. MediBid uses these keys to bring affordable medical care to employees and individuals across the country.
Amerling MD, Richard. “Fee for Service in Medicine Makes Sense.” Healthcare. Newsmax, 30 Jan 2015. Web. 8 Feb 2015.