Alternatives to Fee for Service Payments in Healthcare

Alternatives to Fee for Service Payments in Healthcare

According to the American Progress Organization, American healthcare patients pay more than two times the healthcare fees of other developed countries’ citizens. However, American patients do not receive better care or have better overall health than the patients of other countries. Fee-for-service insurance plans, which are prominent across employer-sponsored healthcare within the United States, contribute largely to the issue of unaffordable healthcare.

Fee-for-Service Payment vs. Value-Based Care

With fee-for-service medical care, patients pay for each medical service they receive separately, whether these services are conducted in one visit or their health episode requires multiple trips to medical practices. Fee-for-service care rewards providers based on the number of procedures they perform rather than the quality of service they provide or their treatment’s success. This encourages providers to deliver more services to receive more money because every service is separately billed and adds to their profit. Fee-for-service insurance plans cause providers to use expensive resources wastefully. Additionally, under these plans, providers do not share a unified goal for the treatment of their patients. 

As a result of the actions taken by providers, patients receive more care than they truly require or want. It should be noted that not all healthcare providers order extra services for patients. Yet, if providers disagree about a course of treatment, the provider who requests more tests will prevail despite the costs associated with potentially unneeded supplementary care. Fee-for-service insurance plans negatively impact all patients, whether or not they are receiving medical treatment. This is because of the ever-increasing premiums and deductibles divided between all insurance members. The fee-for-service approach does not prioritize patients’ financial or physical interests but treats them like an opportunity to get rich quickly. 

Value-based care has become popular following the Affordable Care Act, which limits healthcare fees and benefits patient care. Unlike fee-for-service plans, value-based care emphasizes the needs of patients by lowering the fees they must pay to receive high-quality care. In addition to reducing healthcare costs, value-based care also helps providers coordinate to create a shared plan of action in the best interest of patients. Value-based care benefits patients, providers, and insurance agencies alike by focusing on preventative care, health education, and the management of chronic conditions to reduce the incidence of expensive and time-consuming curative care. This plan of care increases the efficiency of healthcare providers and practices and prioritizes patients’ health outcomes. Value-based treatment considers the health of patients currently getting medical treatment and the entire American population to keep the country healthy.

Three Types of Value-Based-Care

Bundled Payments

Bundled payments establish a fixed price for a patient’s treatment during an episode of poor health. With this approach, physicians earn a certain pre-determined amount of money in exchange for a group of services that a patient is predicted to need. These payments present a solution to the issue of unaffordable fee-for-service care because out-of-pocket costs will not increase for additional and unnecessary care. Bundled payments discourage providers from keeping patients longer than necessary or wasting resources for personal monetary interest. If patients obtain extra care that they do not need, they are not punished with additional fees.

Healthcare providers continue to profit from bundled payments because the total amount of money they receive in exchange for their services is determined by the costs of included services. Providers will be paid more money for completing higher-cost services. Moreover, providers have the flexibility to create payment plans and have the power to determine how money is allocated to each provider involved in the treatment of patients. Overall, this type of value-based care aims to repay providers not only for their services but also for the quality of care they provide and their patients’ experiences. Bundled payments will lead providers to invest their efforts into delivering excellent care, increasing patient outcomes and patient interactions with the healthcare field.

Patient-Centered Medical Homes

Patient-centered homes focus on the preventative care and education of patients as well as coordination between their doctors. A patient’s primary care physician (PCP) acts as their contact for all health-related information to reduce the potential for confusion. PCPs are also in charge of corresponding with all other specialists working with their patients to diminish conflicting plans of action. 

For instance, a primary care doctor might be in charge of coordinating the treatment plan of a 50-year-old who is borderline diabetic and requires knee surgery. Such coordination would allow the patient to acquire higher quality care and help them experience an easier transition back to good health. Ultimately, patient-centered medical homes intend to prevent the need for repeated treatments for the same medical issue and reduce the need for curative care. 

Accountable Care Organizations

Within accountable care organizations, a group of healthcare providers is responsible for communally coordinating to provide low-cost and high-quality healthcare to patients. Organizations are composed of hospitals, medical practices, primary and specialty care physicians who work together to create better healthcare interactions and decrease healthcare fees.


The United States healthcare system is turning toward value-based care slowly but surely. For instance, Perficient found that 50% of fee-for-service insurance plans will transition to value-based care in the near future. Undoubtedly, this will pose a financial obstacle for medical practices that have relied on acquiring elaborate fees to maintain such a high-profit margin. 

For patients, value-based care is the best option available currently. While it seems that this form of healthcare will significantly lower the prices paid by patients, healthcare expenses will likely remain unaffordable and burdensome for some. Luckily, companies such as Denefits can help patients access healthcare.

Denefits offers patients the ability to establish payment plans with the medical practices they visit.  Fully 100% of applicants are approved to create payment plans without having their credit information investigated. This makes Denefits unique because it can help anybody who seeks the ability to finance their medical bills. Medical practices also benefit from their partnership with Denefits because they are offered no-fee payment processing, making Denefits’ payment plans an affordable option for providers who want to help their patients. Hopefully, medical costs will decrease over time, making vital and preventative care available to all patients. Patients can rely on Denefits to aid them by providing healthcare payment plans. Visit the Denefits website today to learn more about the payment plans available and how they can benefit you.

Leave a Reply

Your email address will not be published.

Related Posts

Financing your customers has never been easier

Get In Touch

Set a call at your convenience, so you don’t have to wait.

Request a Callback


Write To Us

Download the Denefits Business Mobile App

Process payments and set up flexible payment plans from any location, on any device.
Easy. Fast. Reliable.

denefits patient financing denefits patient financing

A chiropractor from New Hampshire just financed $900!

A dentist from Nebraska just processed a secure ACH payment of $5000!

A lawyer from Minnesota just completed a contract for $4500!

An orthopedic surgeon from Connecticut just received a guaranteed payment from Denefits!

A med spa professional from West Virginia just received their full contract amount of $4000!

An oncologist from California just processed a secure ACH payment of $6500!

A dentist from Alabama just financed a $8000 treatment!

A chiropractor from Wyoming just received a guaranteed payment from Denefits!

A contractor from Montana just financed a $5000 job!

An electrician from Arizona just financed a $2000 repair!

A dental patient from South Carolina just got approved for financing $9500!

A cosmetic surgeon from Colorado just processed a secure ACH payment of $4000!

A dermatologist from Pennsylvania just received a guaranteed payment from Denefits!

A neurologist from Idaho just financed a $3000 treatment!

An attorney from Maryland just received their full contract amount of $11,000!

A dentist from Texas just financed a $7000 treatment plan!

A chiropractor from Kansas just received a guaranteed payment from Denefits!

A urologist from Georgia just financed a $6000 treatment!

A landscaper from Florida just processed a secure ACH payment of $3500!

A contractor from Arkansas just completed a contract for $1500!