Joe Flower, writing in Hospitals & Health Networks, discusses how code-based, fee-for-service medicine has driven U.S, medicine to be astronomically expensive.

He notes:

“The unifying factor between multiple new strategies unfolding in healthcare right now, including patient-centered medical homes, pay for performance, bundled prices, reference prices, accountable care organizations, direct pay primary care and others, is to find some way around the strict code-based, fee-for-service system, either by avoiding it entirely or by adding epicycles and feedback loops to it to counter its most deleterious effects.”

And he discusses how a cost-control scheme can drive costs up:

“{T}he coding system actually punished … efficiency and effectiveness. Under this system, we got paid for our inefficiencies, and even for our mistakes: Do-overs often would drop far more to the bottom line than the original procedure did.”