What type of health payment plan pays doctors or providers per individual service rendered?

The fee-for-service compensation model is designed to pay healthcare providers for each individual service they deliver to patients. This approach incentivizes providers to perform more services, as they are compensated based on the number of procedures, visits, or treatments provided, rather than a fixed amount for a group of services or a population of patients.

In this payment structure, patients may receive a wider variety of services, but it can also lead to higher overall healthcare costs since providers are rewarded for the quantity of care rather than the quality. Fee-for-service contrasts with models such as capitation, where providers receive a set fee per patient regardless of how many services are rendered, and global budgeting, which allocates a fixed budget for a specific population over a defined time. Managed care typically combines various strategies, including negotiated fee schedules, to control costs and ensure coordinated care.

Understanding fee-for-service compensation is crucial as it highlights the importance of service volume and the potential implications for healthcare delivery and costs.