Unbiased Analysis of Today's Healthcare Issues

Physician Payments in the 1990s

One of my favorite health economists and bloggers is Austin Frakt of the Incidental Economist.  In a recent paper, he examines whether new Health Reform provisions have learned from the mistakes in the 1990s from shifting provider reimbursement to a capitation based-system.  To find the answer, you’ll need to read his commentary (with Rick Mayes) […]

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Do doctors tailor the care they provide based on the patient’s health plan?

Many studies (including my own) have shown that physicians paid via capitation  perform fewer services than those paid via fee-for-service (FFS).  In the current health care world, however, most physicians treat patients from a variety of different insurance systems (notable exceptions are doctors working at Kaiser and the VA). Two important research questions come to […]

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Does Physician income increase from treating more complex patients?

In Denmark at least, the answer is no. “From the theoretical model we find that higher levels of patient complexity lead GPs [General Practitioners] to choose a lower list size, whereas the effect on income is ambiguous. The effect on total utility (income and leisure) is, however, shown to be negative. Using empirical datafrom 1039 […]

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How does managed care affect physician incentives to reduce care?

Patients generally believe that managed care systems are put in place to restrict their access to care.  Many patients believe that physicians who receive capitation compensation will provide less care to their patients than physicians who are paid on a fee-for-service basis.  A paper by Fang and Rizzo (2008) investigates whether or not this is really they […]

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Cochrane Review: The effect of capitation, fee-for-service (FFS) and mixed payment systems on primary care physician behavior

Primary care physicians can be compensated in a number of ways. The most popular are capitation, fee-for-service, salary, or some mixture of the three. But how does the physician compensation method affect care levels? This is the question Gosden et al. (2000) try to answer in their Cochrane review. The authors search the literature for […]

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Health Insurance, Physician Compensation and the Quantity of Medical Care

Many studies have attempted to determine how the manner in which physicians are compensated by health insurance companies affects the quantity of medical care provided. Today I will summarize some seminal studies in this field. Epstein, Begg and McNeil (NEJM 1986) In this study, the authors examine whether or not there is a difference in […]

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Physician Reimbursement and Technology adoption

Economists and health researchers have generally shown that when doctors are paid on a fee-for-service basis, they will advice the patient to undergo more medical procedures than when the doctor is paid on a capitation or salaried basis (see my own paper: “Operating on Commission“). Which payment method maximizes welfare has not been proven and […]

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