Which payment system reimburses providers for each medical service rendered?

The payment system that reimburses providers for each medical service rendered is Fee-for-Service. This model operates on a straightforward principle where healthcare providers receive payment for each individual service they deliver to patients. In this approach, providers are incentivized to increase the volume of services, as their revenue directly correlates with the number of procedures, consultations, and treatments they provide. This can lead to extensive service utilization, as the financial structure rewards providers for each service rather than for health outcomes or patient satisfaction.

In contrast, capitation involves a per-member, per-month payment that covers a range of services, regardless of how many times a patient might use care, thus shifting the risk to providers. Value-based care focuses on the quality of care and health outcomes rather than the number of services rendered, meaning providers may not get paid per service but rather based on their performance. Bundled payments provide a single, fixed payment for a set of services related to a treatment or condition, promoting efficiency and coordination of care rather than solely counting individual services performed.

By understanding how Fee-for-Service works, one can grasp how it contrasts with other payment models that emphasize resource utilization, efficiency, and quality over sheer volume of services.