Fee-for-service payment is not the (main) problem.

OBJECTIVE: To understand the effect of physician payment incentives on the allocation of health care resources. DATA SOURCES/STUDY
SETTING: Review and analysis of the literature on physician payment incentives. STUDY
DESIGN: Analysis of current physician payment incentives and several ways to modify those incentives to encourage increased efficiency. PRINCIPAL
FINDINGS: Fee-for-service payments can be incorporated into systems that encourage efficient pricing - prices that are close to the provider's marginal cost - by giving consumers information on provider-specific prices and a strong incentive to choose lower cost providers. However, efficient pricing of services ultimately will need to be supplemented by incentives for efficient production of health and functional status.
CONCLUSIONS: The problem with current FFS payment is not paying a fee for each service, per se, but the way in which the fees are determined. © Health Research and Educational Trust.