Podcast
Questions and Answers
What is a primary issue with traditional fee-for-service (FFS) plans?
What is a primary issue with traditional fee-for-service (FFS) plans?
- They discourage the use of covered services that are known to be ineffective.
- They ensure all consumers receive the most cost-effective care.
- They create a system where provider costs are always transparent.
- They lead to consumers overutilizing services with low direct costs. (correct)
How do open-ended FFS plans impact the use of uncovered medical services?
How do open-ended FFS plans impact the use of uncovered medical services?
- They ensure that all patients have access to a wide range of covered and non-covered services.
- They may discourage consumers from seeking highly effective care that is not covered. (correct)
- They have no impact on the utilization of uncovered medical services.
- They encourage consumers to seek out highly effective, uncovered services.
According to the description provided, what is a characteristic of the prices within an unplanned FFS system?
According to the description provided, what is a characteristic of the prices within an unplanned FFS system?
- They may not accurately represent true provider costs or consumer valuations. (correct)
- They accurately reflect the true costs of providers and the values for each service.
- They are typically lower than the actual cost of the services provided.
- They are directly controlled by consumer valuations and provider costs.
What scenario is likely to occur under an open-ended FFS plan due to the gap between actual cost and what consumers pay?
What scenario is likely to occur under an open-ended FFS plan due to the gap between actual cost and what consumers pay?
Which of the following best summarizes the problem associated with open-ended FFS plans?
Which of the following best summarizes the problem associated with open-ended FFS plans?
Flashcards
Fee-for-Service (FFS)
Fee-for-Service (FFS)
Traditional healthcare plans where consumers pay a fixed amount for each service received.
Moral Hazard
Moral Hazard
The tendency for people to use more healthcare services when they only pay a small portion of the actual cost.
Cost Shift
Cost Shift
The difference between the actual cost of healthcare services and the amount consumers pay.
Limited Choice Under FFS
Limited Choice Under FFS
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Unplanned Pricing in FFS
Unplanned Pricing in FFS
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Study Notes
Problems with Traditional Fee-for-Service Plans
- Open-ended fee-for-service plans incentivize overuse of covered services. This is because consumers' out-of-pocket costs are often significantly lower than the actual cost of care.
- Consumers may utilize services that provide less benefit than the cost incurred.
- Such plans discourage the use of non-covered services, even if effective.
- Pricing transparency is lacking, resulting in misalignment between consumer payments, provider payments, and the actual costs.
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