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Value-Based Care vs Fee-for-Service: Which Model is Right for Your Practice?3 min read

Value Based Care
Value-based care or Fee-for-service for your practice? Learn which model is best for your medical practice and quality patient care.

Value-based care is the healthcare industry’s future; the sooner you shift, the better. We all know that the fee-for-service model has worked for healthcare organizations for decades, mainly because it is easy to track and keep the billing process in check. 

But now that the Center for Medicare and Medicaid Services (CMS) is offering more and more incentives to providers and patients, value-based care is dominating. You have to be very careful and strategic about making this switch. 

As a small practice, the longer you wait, the risks of losing patients and revenue increase. In the long run, this can also cause irreversible damage to your entire practice. 

Value-Based Care Model

The value-based care models are all about quality patient care. This value-based care in healthcare incentivizes doctors to focus on the quality of care rather than the quantity. 

Providers are then compensated for their services based on the patient care results. In this model, the providers must ensure that the patient is delivered with the best care in only a few visits. This saves patients time and money, and then the insurance companies end up paying less due to fewer readmissions. 

The provider and patient relationship is more on a personal level rather than just transactional. Doctors have the time to be one-on-one with patients and delve into healthcare issues more intricately. Many patients ignore health problems due to the high cost until it is too late for the physicians to do anything. 

In this model, physicians are advised to be more vigilant about what they prescribe and how to access a patient. Providers then recommend treatments that are only necessary to patients, consequently saving the cost for the patients. With the help of medical billing software, the providers can keep track of the charged services and then are paid on time by the insurance/patients. 

Fee-for-Service Model

This healthcare model is about the quantity of patient care rather than the quality. The provider can take on as many patients as possible for a good revenue outcome. Once the patient comes in, the doctor advises several tests and treatments, resulting in a higher cost for the patient.

This happens without the doctors getting to the root of the health problem, hence a poor medical outcome overall. The billing is made more accessible as the nature of the payments is pretty straightforward. 

The services’ metrics are also easily traceable, along with the cost of each treatment/test. Doctors can monitor the revenue coming in directly, but at the same time, the underlying structural issues of the practice from the patient’s viewpoint aren’t addressed. 

Value-Based Care vs Fee-for-Service: Which One’s Better?

Fee-for-service model is the most used one at the moment in the healthcare industry. But this won’t be the case always. More and more CMS value-based care regulations are being rolled out so practices can start switching. 

This is to ensure that healthcare is more accessible and that patients and insurance companies don’t have to pay that much. CMS is encouraging and pushing small and more significant practices to completely switch to this model by 2030. The regulations are more patient-centric as opposed to what fee-for-service has to offer. 

The right medical billing services can also help with active and proper reimbursement in this model. Book a free demo with Transcure today to see for yourself!

Darren Straus
Darren Straus
Leverages expertise in RCM, medical billing, and coding to navigate the complexities of healthcare IT. I like to write about simplifying complex healthcare processes and empowering providers with efficient solutions.



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