Fee-For-Service Is Here to Stay for Now, Says Health Policy Expert

The U.S. health care system will continue to rely on a fee-for-service payment model for at least the next eight to 10 years, making it incumbent on policymakers to work on fixing flaws in the system for the short term. That's the opinion of health policy expert Robert Berenson, M.D., a senior fellow at the Urban Institute, who spoke as part of a panel on Medicare physician payment during the Family Medicine Congressional Conference here May 14-15.

"It is going to take us a while to move to something new, and I would guess there will be parts of the country in which fee-for-service will be with us for a very long time," said Berenson. "We probably will not have the organization developed to take on new payment models and the collaboration and integration that most of these payment models envision in the near future."

Regarding newer and more innovative payment models, such as the patient-centered medical home and accountable care organizations (ACOs), Berenson said, "I do not disagree with those who say we need to be moving to new payment systems." However, he noted, these payment models typically are based on the building blocks of fee-for-service. Thus, the widespread misvaluation within the fee-for-service system may inherently flaw the newer payment models, as well. "You have to fix fee-for-service before you can end it," said Berenson.

"We are not going to have these new payment models tomorrow," he noted. "In the meantime, we have some crisis in health care delivery right now, especially around primary care."

Berenson is a firm believer in the ability of integrated health care groups to improve quality, enhance patient access and control costs. "I think we would be a better system if we had ACOs," he said.

But the ACO concept will not work unless the disparities between high-end subspecialists and primary care physicians are narrowed, he added. "You are not going to get cardiologists to participate in an ACO if they can make $500,000 a year in the fee-for-service system."

Berenson also called for population-based payment models in which a health care organization or a medical practice assumes responsibility for the health of a population of patients who are associated with the organization or practice.

"That used to be called capitation," Berenson said. "That is a dirty word. It is now called global payment."