What is the main incentive for providers under the fee-for-service payment model?

Under the fee-for-service payment model, providers are primarily incentivized by the quantity of services they deliver. This model compensates healthcare providers for each individual service, test, or procedure performed. Therefore, the more services a provider administers, the more they earn. This creates a financial motivation to increase the number of treatments and interventions rather than focusing solely on the quality or necessity of those services.

In this context, the model can lead to an increase in healthcare utilization as there is a direct link between the volume of services provided and reimbursement rates. Providers may offer more tests, consultations, and treatments to maximize their revenue, regardless of whether every service is essential for the patient's care.

The other options, such as providing services at a lower cost or limiting the number of services, do not align with the fee-for-service incentives. Instead, those create contrasting goals that are more associated with value-based payment models, which seek to enhance care quality and cost-efficiency. Similarly, offering bundled payment options represents a shift away from the fee-for-service approach, focusing instead on providing a set of services for a single price. The key takeaway is that the focus on providing more units of service is a hallmark of the fee-for-service payment structure, driving providers to maximize