Fee for Service

Fee-for-Service Healthcare Model Is Not Helping Us

The newest is the greatest—the most potent and the shortest way to better health. We will look if these beliefs hold according to product outcome studies.

Today, we will focus on digital health interventions for high-burden patients. If you are interested in knowing how much you can expect from your new health apps, stay tuned đŸ˜‰

Ultimately, we will push forward Value-based purchasing instead of Fee-for-service models in the standard healthcare system. Start with awareness.

The research has shown that most studies from digital health companies were on healthy patients and were done to bring their products directly to consumers. Gathering information about the effectiveness of such an intervention is the first step. The second step you desire might be to be able to trust the presented results. And repeats these steps until you feel confident about the charged fee.

Or do we actually care about effectiveness proof?

What’s going on in digital healthcare for high-burden cases?

Safavi et al. (2019) addressed the business model bottleneck in the transparency of the product’s effectiveness as they have shown how few studies reported key metrics on health outcomes, cost, and access to care.

If we want to advance the healthcare system, we should normally

  1. Improve treatment outcomes
  2. Lower overall costs
  3. Provide ready access to care

However, the business model is currently not encouraging the companies to push forward outcomes studies for high-burden patients but to stay in a conventional Fee-for-service payment system.

“Even the most aggressive predictions from the Centers for Medicare and Medicaid Services (CMS) under MACRA estimate that fee-for-service payment will represent more than 50 percent of Medicare payments at the end of 2018.33” (Safavi et al., 2019, p. 121)

Can Fee-for-Service Healthcare Evolve?

Merging IoT and Healthcare is not novel. For instance, the US population widely adopted digital health. It is said that 80% of US people used digital health applications or technology in 2019.

The market becomes more crowded and diverse as it increases in size. Consumers worldwide should spend almost $50 billion by 2020 on digital health solutions. In addition, almost 300 private digital health companies got venture funding of nearly $6 billion in 2017. What a growth.

In short, below is how we might create a better healthcare delivery and get away from Fee-for-Service healthcare by

  1. provide new data insights
  2. provide connectivity
  3. improve a patient engagement
  4. improve a provider-patient coordination

To be sure, better healthcare delivery is not entirely how we can improve treatment outcomes for high-burden patients. However, I believe a business model innovation is crucial to achieving that.

All stakeholders should encourage transparent product effectiveness and incentivize such market regulations. Significantly policymakers can help shape future ecosystem guidelines to clarify the landscape around digital health products.


The conversation around Value-based purchasing vs. Fee-for-service models can take us closer to the impact-focused market. In fact, proper patient care reimbursement can potentially direct the trend of Sick-care to true Healthcare adoption. While there is no easy way to make effectiveness transparent, digitalization will take a long time for customers and insurers to form a sustainable business model; we can start the movement!