Virtually all experts agree that the fee-for-service system—doctors are rewarded for the quantity of care rather than its quality or effectiveness—is a primary reason that the cost of care is so high.

The lack of a gatekeeper in traditional fee-for-service insurance leads to over-doctoring that is often harmful as well as costly, as that IBM executive discovered.

In countries where hospital treatment is offered on a fee-for-service basis, such in China, this can create a major barrier to referral for treatment under the national tuberculosis programmes.