The anti-fee-for-service side was taken by Paul Ginsburg. The pro-FFS side was taken by Richarad Amerling.
I basically agree with Dr. Amerling and I want to quote a couple of excerpts from his piece:
The real cause is the institution and growth of direct third-party payments. Inflation in health care was trivial until the mid-1960s, when Medicare and Medicaid were thrust into existence. The other big driver is the morphing of health insurance into a prepayment model, where even routine, low-cost care is covered. When neither the consumer nor the provider “feels” the cost of the service offered, it promotes overuse of medical services and high levels of spending. Government data show that 48% of health dollars were “out of pocket” in 1960. By 2008, this was down to 12%...But I highly recommend reading both sides of this debate, "Should the U.S. Move Away From Fee-for-Service Medicine?"
In other professions that feature fee for service but where third-party payments play a much smaller role, such as in law, dentistry or veterinary medicine, there is little excessive price inflation. Similarly, in areas of medicine outside the third-party-payment system, such as cosmetic surgery, Lasik eye surgery, and direct pay practices, prices have actually declined over time.
It is impossible to eliminate self-interest, which is embedded in human nature. But if some doctors and hospitals over time get away with unnecessary tests or padding bills, it isn’t because of fee for service. It’s because the patients are shielded from the impact by third-party payments.
Fee for service directly aligns payments with care, which is what most patients want, especially when facing serious illness. It’s incentive-based and increases the likelihood of quality care in a timely manner...
Here is the related video.
