The Australian model- fee for service

So what is the Australian model? This is called a fee for service (FFS) system. 

Keeping the gym analogy going- if the UK capitation system is like a monthly direct debit, the FFS model is like paying a fee each time you use the gym but with no monthly payments. Obviously, you pay according to the services you use. 

Many advantages are immediately apparent: it costs nothing to those who don't use the gym. Light users don't subsidise heavy users. If demand goes up, the gym owners simply invest in more facilities, equipment,staff etc. The gym owners have no incentive to try and squeeze profits by providing inferior services or trying to curtail use of their facilities. In fact, they are more than happy to oblige their customers as they are competing with other gyms 

So what about the disadvantages? Firstly, continuity of care is a casualty. People are free to go wherever they like and are not registered with any one practice or doctor (no monthly direct debit). 

Secondly, since people pay a fee to get in, the assumption is they will want something for it so mere reassurance or an offer to review later doesn't work as it does in a capitation based system. Drs feel obliged to investigate or prescribe in such a system. Also from a business point of view it is inherently more risky- you invest in a new service or staff and patients leave to join a new practice across the road. 

Also there is a risk of spiralling costs- there is no cap. Patients demand more and more and business just keeps expanding to fill the demand putting the whole economy at risk. 

But, patients are not gym goers and most people like to see one Dr and value continuity of care. So what is the evidence? Is there evidence that Australia or Canada spend huge amounts on health care? And what about outcomes. Who fares better?

In my next post I will evaluate the evidence to see if any of the assertions are indeed true.