Is returning to a Fee for Service system the solution to Health Care?
Suppose insurance only covered catastrophic cases. Everything else would be out of pocket. Wouldn't this bring real competition and drive prices down? How would this system compare to other countries?
- martinLv 71 year agoFavorite Answer
While it's true that the absence of insurance for routine medical care definitely would provide an incentive for doctors to lower their fees, the medical profession is mainly operating within the private sector of the economy, so that doctors would compete to the point where only the good ones would be able to earn a living. The solution to Health Care is to help the patients who mostly are middle class people who find medical bills staggering.
- StephenWeinsteinLv 71 year ago
The first problem is that when insurance covers only catastrophic cases, patients simply wait for their cases to become catastrophic so that insurance will cover them. The insurance company has to pay more, not less. For example, because it won't pay for a visit to the doctor's office when the case is not yet catastrophic, the patient doesn't go to the doctor when the case is not yet catastrophic, and the insurance company ends up having to pay for an ER and major surgery when the case becomes catastrophic, none of which would have been necessary if it had covered a visit to the doctor's office before it became catastrophic.
The second problem is that the fees for services often don't get paid. At some ER's, 50-90% of the bills never get paid. This drives prices up, because they have to charge a lot to make up for what they lose on patients who don't pay.
- ProfessorLv 71 year ago
When you drive prices down you also drive down quality and squash competiron as margins get smaller and smaller with everyone is competing to offer the lowest prices.
See airline industry.
- JeffreyLv 71 year ago
What we have now is mostly fee for service. Providers are paid on the basis of the services they provide, not a flat salary. When the person receiving the services does not have to worry about what it costs would reduce costs. Imagine what car insurance would cost if it covered all routine maintenance and all collision coverage, glass breakage, etc including pre-existing conditions.
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- Anonymous1 year ago
this is how auto repairs work, the difference is that auto repair shops post their prices and you can get estimates but with doctors and hospitals , the prices are not transparent and while you can easily switch mechanics you'd have to take your medical records everywhere and start over with your medical history with each new doctor and that will take time