Why Transparency and Innovation Will Ultimately Trump Fee-For-Service

Lynn Jennings

The current FFS model does not compete in the open market the way that most services and commodities do, based on price, quality and availability.  If we had a transparent market for health care, providers would be forced to compete based on all three components.  Although most health care providers are paid based on some fixed fee schedule established by Medicare, HMOs or PPOs, a provider’s ability to differentiate is removed.  Consequently, the incentive to over treat becomes the only viable way to increase revenue.

Examine the health care market for services that are not covered by insurance, and you find dramatically different forces at play.  Prices have not escalated in the way that covered services have and, in fact, many elective procedures have declined in price. Medical tourism has flourished primarily in the cosmetic arena.

The internet, medical tourism and the public’s thirst for information have made transparency inevitable. But that evolution is being fought by nearly everyone with a stake in the old paradigm.  Large health plans and third party administrators perceive their value to be their networks and the confidentiality of those contracts.  Large health care providers, like hospital systems, also profit from the lack of transparency.

It will take small, independent, maverick providers to challenge the system by being transparent. As health care’s cost becomes increasingly unaffordable, purchasers will be more and more encouraged to shop for price and quality, and they will find providers who are willing and able to deliver transparency and value.  Once opened, that flood gate will never be closed!

Lynn Jennings is CEO of WeCare TLC, LLC, an online clinic and medical management firm based in Longwood, FL. 

About Brian Klepper

Brian Klepper is a health care analyst and the Chief Development Officer of WeCare TLC onsite clinics.
This entry was posted in Analytics, Innovation, Market Dynamics, Medical Management, Policy/Law/Regulation, Quality, Tools and tagged , , , . Bookmark the permalink.

One Response to Why Transparency and Innovation Will Ultimately Trump Fee-For-Service

  1. Pingback: www.healthcaretransparencynow.com — Porter on myths of hospital cost accounting and on finding true costs

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