What is a key characteristic of the fee-for-service (FFS) reimbursement model?

A key characteristic of the fee-for-service (FFS) reimbursement model is that it incentivizes the quantity of services provided. In this model, healthcare providers are paid for each specific service, test, or procedure they perform. This creates a financial incentive for providers to increase the number of services rendered, as they receive compensation based on the volume of care delivered rather than the quality or outcomes of that care.

The structure of FFS leads to situations where more services may be delivered, regardless of the necessity of those services, potentially resulting in higher healthcare costs. This contrasts with other payment models that might focus on efficiency or bundled payments, where the aim is to provide comprehensive care for a single payment, encouraging providers to deliver necessary treatments rather than performing a higher quantity of services.