Three of the dirtiest words in health care are “fee for service.”
For years, U.S. officials have sought to move Medicare away from paying doctors and hospitals for each task they perform, a costly approach that rewards the quantity of care over quality. State Medicaid programs and private insurers are pursuing similar changes.
Yet the $400 billion single-payer proposal that’s advancing in the California legislature would restore fee-for-service to its once-dominant perch in California.
A state Senate analysis released last week warned that fee-for-service and other provisions in the legislation would “strongly limit the state’s ability to control costs.” Cost containment will be key in persuading lawmakers and the public to support the increased taxes that would be necessary to finance this ambitious, universal health care system for 39 million Californians.
Several health experts expressed skepticism about the bill’s prospects in its current form.
“Single-payer has its pros and cons, but if it’s built on the foundation of fee-for-service it will be a disaster,” said Stephen Shortell, dean emeritus of the School of Public Health at the University of California-Berkeley. “It would be a huge step backwards in delivering health care.”
Paul Ginsburg, a health economist and professor at the University of Southern California, agreed and said the legislation reads like something out of the 1960s in terms of how it wants to reimburse providers.
“There’s broad consensus we ought to go from volume to value. This bill ignores all the signs pointing to progress and advocates a system that failed,” he said.
Backers of the Healthy California proposal are pushing for a vote in the Senate by Friday so the legislation can go to the state Assembly and remain in play for this year’s session.
The authors say that their single-payer proposal won’t rely entirely on old-fashioned fee-for-service and that there’s plenty of time for the bill to be amended. According to the authors, some of the criticism in the legislative analysis reflects a misreading of the bill: It would, they say, include some use of managed care.