AHRQ Study Examines Trends in Physician Payment Methods
Only 5 percent of office-based physician visits in 2013 were covered under pure capitation, while 95 percent of visits were reimbursed under some form of a fee-for-service system, a new AHRQ study found. Capitation, which pays physicians a flat monthly amount to treat patients, was touted as an effective way to control spending in the 1980s and 1990s, but its use declined from about 7 percent in 2007 to 5 percent in 2013, according to data from AHRQ’s Medical Expenditure Panel Survey. New payment models formed under the Affordable Care Act are designed to shift the focus of payment from quantity to quality, which may be more successful than traditional capitation, according to the study. New alternatives to both traditional fee-for-service and pure capitation to pay physicians for health care services, such as through Accountable Care Organizations, global or bundled fees and other value-based payment, have been created to incentivize increases in quality and thereby contain costs. While it remains unknown whether new payment methods can control spending, payment reform must address the reality that physicians are unwilling to accept all of the financial risk for providing care, the authors concluded. The study, “Fee-For-Service, While Much Maligned, Remains the Dominant Payment Method for Physician Visits,” and abstract were published in the March issue of Health Affairs.
Fee-For-Service, While Much Maligned, Remains The Dominant Payment Method For Physician Visits
Abstract
Recent concerted efforts have sought to shift provider payment away from fee-for-service and toward risk-based alternatives. Despite these efforts, fee-for-service not only remains the dominant payment method but has continued to grow, with nearly 95 percent of all physician office visits in 2013 reimbursed in this fashion.
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