Unbiased Analysis of Today's Healthcare Issues
There has been much research showing that fee-for-service (FFS) leads to increased provision of medical services and capitation leads to decreased provision of medical services. My own research shows that there are system-wide effects and that the impact of capitation for primary care physicians on services may depend on whether specialists are also reimbursed via…
While I leave the answer to the first question for another day, the answer to the second question is ‘yes’. Done, Herring and Wu (2019) explain’s Maryland’s approach to global capitation payments for hospitals covering both inpatient and outpatient hospital services. Maryland is the only state that still operates an all‐payer rate‐setting system for hospitals,…
In single payer systems, the problem of adverse selection in health insurance is solved because the single payer must cover all people. Because the single payer cannot avoid covering any individual, there is no strategic gaming on coverage decisions. There may, however, be strategic decisions made on the treatment of patients. Consider the case of…
How do people respond to financial incentives? In the medical world, physicians often are paid fee-for-service (FFS) or capitation. Physicians receiving FFS reimbursement receive additional compensation for each additional service they do. For instance, physicians under FFS receive twice as much compensation for 2 office visits as they would for 1 office visit. On the other hand,…
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)…
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…
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…
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…
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…
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…