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How to Pay Family Doctors: Why "Pay per Patient" is Better Than Fee for Service

Author

Listed:
  • Ake Blomqvist

    (Carleton University)

  • Colin Busby

    (C.D. Howe Institute)

Abstract

Physician compensation accounts for about one-fifth of all Canadian healthcare spending. But physicians’ decisions, particularly those made by primary care doctors, are the conduit for the majority of the system’s costs. The incentives physicians have to promote efficiency, therefore, affect the overall quality and value of healthcare services. We believe that a remuneration model for primary care doctors that emphasizes per-patient payments is the best way for health systems to pay its front-line doctors, although it is less applicable to specialists. Further, we believe that over time the capitation scheme could be extended so that primary care physicians would keep track of the costs of their referrals and prescribed treatments, to encourage the most appropriate and cost-effective methods of treatment and make better use of total health system resources.

Suggested Citation

  • Ake Blomqvist & Colin Busby, 2012. "How to Pay Family Doctors: Why "Pay per Patient" is Better Than Fee for Service," C.D. Howe Institute Commentary, C.D. Howe Institute, issue 365, October.
    • Handle: RePEc:cdh:commen:365
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    References listed on IDEAS

    as
    1. Blomqvist, Ake & Leger, Pierre Thomas, 2005. "Information asymmetry, insurance, and the decision to hospitalize," Journal of Health Economics, Elsevier, vol. 24(4), pages 775-793, July.
    2. Mark V. Pauly & Thomas G. Mcguire & Pedro P. Barros (ed.), 2011. "Handbook of Health Economics," Handbook of Health Economics, Elsevier, volume 2, number 2.
    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. Finocchiaro Castro Massimo & Lisi Domenico & Romeo Domenica, 2024. "An Experimental Analysis of Patient Dumping Under Different Payment Systems," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 24(1), pages 205-258, January.
    2. Adam Found & Peter Tomlinson, 2012. "Hiding in Plain Sight: The Harmful Impact of Provincial Business Property Taxes," C.D. Howe Institute Commentary, C.D. Howe Institute, issue 368, December.
    3. Claude Forget, 2014. "The Case of the Vanishing Quebec Physicians: How to Improve Access to Care," C.D. Howe Institute Commentary, C.D. Howe Institute, issue 410, May.
    4. William B.P. Robson, 2018. "Healthcare Costs in Canada: Stopping Bad News Getting Worse," e-briefs 275, C.D. Howe Institute.
    5. Philip Cross & Philippe Bergevin, 2012. "Turning Points: Business Cycles in Canada Since 1926," C.D. Howe Institute Commentary, C.D. Howe Institute, issue 366, October.
    6. Elena Falcettoni, 2020. "The Consequences of Medicare Pricing: An Explanation of Treatment Choice," Finance and Economics Discussion Series 2020-063, Board of Governors of the Federal Reserve System (U.S.).
    7. Benjamin Dachis, 2018. "Fiscal Soundness and Economic Growth: An Economic Program for Ontario," C.D. Howe Institute Commentary, C.D. Howe Institute, issue 505, March.
    8. Ake Blomqvist, 2013. "Paying Hospital-Based Doctors: Fee for Whose Service?," C.D. Howe Institute Commentary, C.D. Howe Institute, issue 392, October.
    9. Ake Blomqvist & Colin Busby, 2015. "Rethinking Canada’s Unbalanced Mix of Public and Private Healthcare: Insights from Abroad," C.D. Howe Institute Commentary, C.D. Howe Institute, issue 420, February.
    10. Åke Blomqvist & Colin Busby, 2016. "The Naylor Report and Health Policy: Canada Needs a New Model," e-briefs 240, C.D. Howe Institute.
    11. Colin Busby & Åke Blomqvist, 2017. "The Paradox of Productivity, Technology, and Innovation in Canadian Healthcare," C.D. Howe Institute Commentary, C.D. Howe Institute, issue 480, May.
    12. William B.P. Robson, 2016. "Healthcare Spending Decelerating? Not so Fast!," e-briefs 246, C.D. Howe Institute.
    13. Vu, Thyna & Anderson, Kelly K. & Devlin, Rose Anne & Somé, Nibene H. & Sarma, Sisira, 2021. "Physician remuneration schemes, psychiatric hospitalizations and follow-up care: Evidence from blended fee-for-service and capitation models," Social Science & Medicine, Elsevier, vol. 268(C).
    14. Ake Blomqvist & Boris Kralj & Jasmin Kantarevic, 2013. "Accountability and Access to Medical Care: Lessons from the Use of Capitation Payments in Ontario," e-briefs 168, C.D. Howe Institute.

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    More about this item

    Keywords

    Social Policy; Health Policy; Canada; healthcare spending; physicians' compensation;
    All these keywords.

    JEL classification:

    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health

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