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Comparing Value-Based Care With Fee-For-Service Models

Comparing Value-Based Care With Fee-For-Service Models
Today, we will compare value-based care with fee-for-service models.

Owning and running a medical practice can be a lot of work. In addition to daily patient care, you are also a small business owner with all of the work that goes into that. Some of that work is pretty universal to all businesses, like managing payroll and accounts payable and trying to find new clients, but other parts are unique to the field of medicine. One of those unique things is deciding on your model of care, specifically deciding between a fee-for-service model or a value-based care model. Read on to learn the differences so that you can make the best decision for the longevity of your business.


This is the model that everyone assumes all care providers use, mostly because for many, many years this is the model that has prevailed. In this model, providers are paid based on the service rendered, regardless of whether it is effective or not. In many ways, this model makes sense – there is sometimes no way to know exactly what will work in a given situation until you try it, and the time and supplies for that service should be paid for by someone. It is unreasonable to expect a provider to work for free simply because the treatment didn’t work or didn’t work completely. This line of thinking is why 97% of practices still used the model in 2020, coupled with the fact that insurance claims and medical billing systems are designed around it.

Value-Based Care

Value-based care encourages and incentivizes quality over quantity. While the most cost effective way to make money in a fee-for-service system is to see as many billable patients as possible in a given time, the way to do it in a value-based system is to provide quality care to each individual patient and do the best you can to prevent illness. In a value-based care system, the provider spends more time with each patient and applies services judiciously while also following-up to assess their effectiveness. This type of system is much more focused on long-term health and measuring patient outcomes. Since the Affordable Care Act first went into law, this system has become more prominent, but it is not yet the standard. 

Which Is Better?

This is a tricky question to answer. Value-based care is better for most patients and does the best for maintaining long-term community health. However, some patients are so entrenched in the fee-for-service system that they don’t feel taken care of if you aren’t offering as many tests and treatments as possible to help them (education of patients can go a long way towards easing these misconceptions). There is an ongoing shift in both perception and policy which will likely continue as well, so the best course of action as a provider is to be ready to work in either system. Those ready and able to shift to a value-based care system as they need to will be best aligned for success.

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This entry was posted on Tuesday, July 12th, 2022 at 5:28 pm. Both comments and pings are currently closed.