Differentiate fee-for-service (FFS) from value-based purchasing (VBP) in hospital payments.

• A. FFS pays for individual services; VBP links payments to quality and performance outcomes to incentivize value.
• B. FFS allocates a fixed global budget for all hospital services.
• C. FFS uses value-based metrics to adjust payments.
• D. FFS provides capped payments regardless of services.

Answer: (A)

In hospital payments, the distinction is about how reimbursement is tied to what you actually deliver. Fee-for-service pays you for each service or procedure performed—the more tests, procedures, and visits, the more you get, regardless of how well the care works or patient outcomes. Value-based purchasing, on the other hand, changes the math by tying all or part of the payment to performance on quality and outcomes—so hospitals are rewarded for high-quality, safe, efficient care and good patient experience, and potentially penalized for poor results.

So the best description is that fee-for-service pays for individual services, while value-based purchasing links payments to quality and performance outcomes to incentivize value. The other options describe concepts (like fixed global budgets or caps) that don’t define how FFS or VBP function in standard hospital payment models.