However evidence of the effectiveness of FFS in improving health care quality is mixed, without conclusive proof that these programs either succeed or fail.
[2] Similarly, when patients are shielded from paying (cost-sharing) by health insurance coverage, they are incentivized to welcome any medical service that might do some good.
A variety of reform efforts have been attempted, recommended, or initiated to reduce its influence (such as moving towards bundled payments and capitation).
[6] FFS creates a potential financial conflict of interest with patients, as it incentivizes overutilization,[7]—treatments with an inappropriately excessive volume or cost.
[3] Executives regret the changes to managed care, believing that FFS turned "industrious, productivity-oriented physicians into complacent, salaried employees.
[16] In addition to the Mayo Clinic, other health care systems serve as co-ordinated/integrated care alternatives to the FFS model like South Central Pennsylvania's Geisinger Health System whose physicians, residents and fellows are paid a salary with the potential for bonuses depending upon patient performance, Utah's Intermountain Healthcare, the Cleveland Clinic, and Kaiser Permanente.
[25] In 2009, Massachusetts, with the highest health care costs in the country, had a group of ten health care experts who worked under legislative mandate to come up with a plan to tackle costs (the Massachusetts Payment Reform Commission); they unanimously concluded the FFS model must be done away with.
[17] In 2014, Maryland set up an independent commission which created a fixed revenue system, or global budget for the state's hospitals.
Budgets were originally based on the number of patients and procedures reported in 2013, with annual adjustments for inflation and population change.
Going forward, it is to a hospital's benefit to avoid unnecessary procedures and to adopt preventive programs that reduce chronic illness and re-admissions.
In its first five years, Maryland's new payment system saved an estimated $1.4 billion in Medicare costs compared to other states.
[26] An even more striking difference was observed during the COVID-19 pandemic as fee-for-service hospitals provided less of the elective services that they depended on for funding.