biostudies-literatureUnknown55(4)Dowd BETow Foundation<h4>Objective</h4>To understand the effect of physician payment incentives on the allocation of health care resources.<h4>Data sources/study setting</h4>Review and analysis of the literature on physician payment incentives.<h4>Study design</h4>Analysis of current physician payment incentives and several ways to modify those incentives to encourage increased efficiency.<h4>Principal findings</h4>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.<h4>Conclusions</h4>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 services research491-495https://www.ebi.ac.uk/biostudies/studies/S-EPMC7375993biostudies-literatureFee-for-service payment is not the (main) problem.PMC7375993Laugesen MJDowd BEfalseFee-for-service payment is not the (main) problem.<h4>Objective</h4>To understand the effect of physician payment incentives on the allocation of health care resources.<h4>Data sources/study setting</h4>Review and analysis of the literature on physician payment incentives.<h4>Study design</h4>Analysis of current physician payment incentives and several ways to modify those incentives to encourage increased efficiency.<h4>Principal findings</h4>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.<h4>Conclusions</h4>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.2020-01-01T00:00:00Z2020 Aug2024-02-15T20:44:18.847Z2022-02-11T00:16:06.499ZS-EPMC73759933270038710.1111/1475-6773.13316