According to the author of our book, a fee for service is a method of reimbursement based on payment for services rendered, with a specific correlated to each specific service (Zelman, McCue & Glick, 2009). An insurance company, the patient, or a government program such as Medicare or Medicaid may make a payment. The majority of 47 million people on Medicare were on the fee for service Medicare program with 24% enrolled in a Medicare Advantage Program plan (Manchikanti, Caraway, Parr, Fellows, & Hirsch, 2011). Individual not eligible for Medicare will qualify for Medicaid based upon a modified adjusted gross income. Aging population

The increased need for long term care for elderly has led to increased health care cost (Zelman, McCue & Glick, 2009). The average life expectancy of Americans has risen only slightly over the past few decades from 71. 1 to 75. 2 for men and from 78. 2 to 80. 4 for women from 1983 to 2005 (Zelman, McCue & Glick, 2009). Aging population impacts system wide health care spending and federal spending. By driving up per capital health spending for all age groups, such as increases in the unit costs of health care naturally will amplify somewhat the modest impact that aging by itself will have on health spending through the demand side (BPC, 2012).

Chronic Diseases Individuals with chronic diseases overcome a great percentage of health care services in the United States. Chronic Diseases can be associated with the elderly but also the younger generation. Chronic diseases such as liver failure, cancer, diabetes and mental illness can end up being an expensive treatment for a lifetime. Mental illness being substance abuse, bipolar disorder or major depression can worsen the prognosis for treatment of the chronic condition. Technology Technology used today that is used to increase life expectancy is also leading to increased demands on the healthcare system.

As the demand increase, so do the prices. Health care cost overall are rising at about twice the rate of the gross domestic product. Leaving fewer people being able to afford the medical care they need. In the U. S. many people associate, the use of more advanced technology, more tests and procedures will better your care. Though it is often an overall cost driver, advancing technology can positively or negatively impact cost growth. Previous studies have shown tremendous differences in newer technologies and the older ones, which may either increase or decrease cost and those that expand the range of treatments available (BPC, 2012).