Why is the fee-for-service model considered negative?

Why is the fee-for-service model considered negative?

• A. It rewards better patient outcomes
• B. Clinicians will do more so they get paid more and may over-treat
• C. It reduces administrative tasks
• D. It ensures optimal care

Answer: (B)

Payment incentives shape clinical decisions. Under fee-for-service, clinicians are paid for each service, test, or procedure performed, so income rises with higher service volumes. This motivates doing more care—even when it isn’t strictly needed—leading to over-treatment, unnecessary testing, higher costs for patients and the system, and care that focuses on quantity rather than patient outcomes. In short, it encourages more interventions to boost earnings, which is why this model is viewed negatively.

Payment incentives shape clinical decisions. Under fee-for-service, clinicians are paid for each service, test, or procedure performed, so income rises with higher service volumes. This motivates doing more care—even when it isn’t strictly needed—leading to over-treatment, unnecessary testing, higher costs for patients and the system, and care that focuses on quantity rather than patient outcomes. In short, it encourages more interventions to boost earnings, which is why this model is viewed negatively.