SGIM Calls for End to Fee-For-Service

John Commins, March 4, 2013

Fee-for-service medicine is a financially unsustainable payment model that should be phased out by the end of the decade, a study commissioned by the Society for General Internal Medicine recommends.

The study released Monday by SGIM's National Commission of Physician Payment Reform calls for an aggressive five-year transition into blended payment models such as patient-centered medical homes or accountable care organizations that reward outcomes quality and value. During the transition, the commission said fee-for-service would be "recalibrated" to correct payment inequalities for services such as evaluation and management.

Commission Chairman, Steven A. Schroeder, MD, professor of health and healthcare at the University of California, San Francisco, says he went into the year-long project last March thinking that fix fee-for-service could be fixed, but concluded after months of study that an aggressive phase-out makes more sense.

"It's so complicated to fix it and we've been trying for 30 years," Schroeder tells HealthLeaders Media.

"It promotes higher volume, and because the valuations tend to be huge, to create more high-tech things. It changes the mix of services that a physician provides because there is such a gray area in healthcare. At the margins it creates incentives to do more costly things."

John Commins

John Commins is a senior editor at HealthLeaders Media.


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