Question

(True or False): Fee for service payment methods always create an incentive for providers to reduce the volume of services provided. (2 points)

Answer 1

False.

Fee for service occurs when the service provider receive the fees for each service. For e.g doctors and other health care providers receive a fee for each service such as office visits, various test, procedures etc.

In health care, incentive is on higher side if the treatments provided is more as the payment is dependent on quantity of care, rather than quality of care. Similarly when patients are covered with health insurance they welcome any medical service that might do some good.

Hence the statement mentioned "fee for service payment methods always create an incentive for providers to reduce the volume of services provided" is incorrect