Financial incentives matter. If one had to give economists (and health economists as well) a slogan, this would be it.
In 2006, the Netherlands instituted a form of managed competition. According to Van Dijk et al (2012) ”Before 2006, inhabitants had either compulsory social (sickness fund, 62%) or voluntarily private (36%) health insurance depending, among others, on income (below a gross annual income of €33 000 people were socially insured). This combined system of social and private health insurance was replaced by a compulsory single universal basic health insurance covering a legally defined package of basic benefits including GP care. GPs act as gatekeepers for secondary care…”
The implementation of a managed competition system in the Netherlands cause two major changes to the primary care payment system. First, cost sharing was abolished for privately insured individuals. Second, whereas previously doctors treating socially-insured patients received a capitation payment and physicians treating privately-insured beneficiaries received a fee-for-service payments, after 2006 all physicians received a mixed capitation/fee-for-service payment system.
How did these changes affect the number of primary care visits in the Netherlands? The authors of the study used a sample of GP practices participating in the 2005-2007 Netherlands Information Network of General Practice (LINH) study to conclude the following:
“Abolition of cost sharing led to a higher increase in patient-initiated utilisation for privately insured consumers in persons aged 65 and older. Introduction of fee-for-service for socially insured consumers led to a higher increase in physician-initiated utilisation.”
Source:
- van Dijk, C. E., van den Berg, B., Verheij, R. A., Spreeuwenberg, P., Groenewegen, P. P. and de Bakker, D. H. (2012), MORAL HAZARD AND SUPPLIER-INDUCED DEMAND: EMPIRICAL EVIDENCE IN GENERAL PRACTICE. Health Economics. doi: 10.1002/hec.2801
Physician Influence on Federal Health Spending, 1950s
April 9, 2012 in Books, Licensure, Physician Compensation, Supply of Medical Services | No comments
The 1950s was a time of unprecedented technological advances in the science of medical care. In 1955, epidemiologists at the University of Michigan developed a polio vaccine. These advances lead the federal government to increase funding for research. Between 1955 and 1960, Congress increased the budget of the National Institutes of Health (NIH) from $81 million to $400 million. Physicians did not support increased funding for all aspects of medical care, particularly those what would increase competition.
“More money for research met no objections from the AMA. However, the story of aid to medical education was different, and it is worth recalling the contrast. In 1949 Congress was close to approving a five-year program of grants and scholarships for medical schools to increase the nation’s supply of physicians. A bill had passed the Senate and was reported out of House committee when it hit a small snag. Yet it seemed likely to pass the next year. The House of Delegates of the AMA approved the measure in December 1949. However, two months later, concerned about setting dangerous precedents, the AMA board reversed its position, and the bill died in Congress. Despite wide support from other groups, aid to medical education was blocked throughout the 1950s.”
Although physicians did not support more funds for medical education, medical schools grew tremendously during this period.
“The infusion of money into research and training programs created new opportunities in–and for–medical schools. During the 1940s, the average income of medical schools tripled form $500,000 to $1.5 million a year; by 1958-59 the average schools income was up to $3.7 million and ten year later to $15 million.” Medical schools became sprawling, complex organizations that now saw their missions as three-fold: research, education, and patient care (usually in that order).”
Tags: medical schools, Physicians