Fee-for-Service Is Broken. Here’s What We’re Doing About It.
I’ve spent two posts diagnosing our industry. The arbitrage that rewards buying DME companies without improving them. The experiment proved that when payment flips to outcomes, patients, payers, and suppliers all win.More than one person asked for a fair follow-up: easy to write about. Would you do it?
Here’s my answer.
Eastern MedTech is pivoting to what we call Earned Care.
The idea fits in two sentences. We earn our revenue when our patients do better. We earn less when they don’t.
Simplicity and sincerity!
Not fee-for-service with a quality bonus stapled on. Not a pilot. A different deal: better, or less.
Why not just say “value-based care”? Because after fifteen years, that phrase covers almost anything. Most of what gets called value-based is still fee-for-service underneath, with a bonus or a report card attached. The volume engine keeps running.
“Value-based” describes how a payment is calculated. “Earned” describes who has to deserve it. You can’t say earned without implying “or not.” That’s the whole difference.
In practice: we are offering payers contracts where we accept LESS than fee-for-service would pay us today, guaranteed savings from day one, and tie the rest of our revenue to our patients’ verified outcomes. Fewer hospital visits. Therapy that’s actually used. Equipment that actually fits. Measured by devices, claims, and the patients themselves, not our own paperwork. Deliver, and we do better than the old model. Fall short, and we do worse. Our
margin, at risk, on our patients’ health.
We’ve already put proposals on the table with payers. I won’t detail the how. That’s ours. But the what is what I’ve been writing about: we want to stop getting paid per unit shipped and start getting paid for our patients’ outcomes. Why would a small company volunteer for this? The math from my first post. Under fee-for-service, investing in patients is pure expense. So nobody does it. So the fastest extractor wins every auction for every DME company. The only way out is for someone to go first and prove the aligned model earns more than the extractive one.
Somebody has to exist. We decided it’s us.
One thing I’ve learned already: the hardest part isn’t economics. Those work. It’s that fifty years of fee-for-service has trained everyone, payers included, to be suspicious of a supplier who volunteers for accountability. That suspicion is the most fee-for-service built around itself.
We’re going to cross it. I’ll report what we learn, including what goes wrong. That’s a commitment, not a marketing line.
To the payers reading this: the offer stands. Pay us for outcomes. Hold us to it.
To the operators: watch what happens to us. If we’re right, the early movers own the next decade of this industry.
