IDEAS home Printed from https://ideas.repec.org/a/wly/hlthec/v8y1999i4p335-343.html
   My bibliography  Save this article

Addressing the inequity of capitation by variable soft contracts

Author

Listed:
  • Amir Shmueli
  • Jacob Glazer

Abstract

In the search for greater efficiency and cost‐containment, many health systems have introduced the practice of medical care providers operating under a fixed budget, often referred to as the capitation or fundholding contract. Although the capitation contract seems equitable at first glance, the sequential decision‐making practice of providers—shaped by their rate of present‐preference and their attitude toward the risk of running out of budget—may result in serious violations of basic equity principles. We propose a variable soft (or mixed) payment contract (VSC), where the share of the retrospective payment increases over time, as a way to make the contracts more equitable. We also discuss how the parameters of the capitation contract (length of the budget period, soft or hard contracts, solo vs. consortium practice etc.), which are usually set by efficiency criteria, may have serious implications with regard to the equity of the system. Copyright © 1999 John Wiley & Sons, Ltd.

Suggested Citation

  • Amir Shmueli & Jacob Glazer, 1999. "Addressing the inequity of capitation by variable soft contracts," Health Economics, John Wiley & Sons, Ltd., vol. 8(4), pages 335-343, June.
    • Handle: RePEc:wly:hlthec:v:8:y:1999:i:4:p:335-343
    DOI: 10.1002/(SICI)1099-1050(199906)8:4<335::AID-HEC433>3.0.CO;2-O
    as

    Download full text from publisher

    File URL: https://doi.org/10.1002/(SICI)1099-1050(199906)8:43.0.CO;2-O
    Download Restriction: no
    File URL: https://libkey.io/10.1002/(SICI)1099-1050(199906)8:4<335::AID-HEC433>3.0.CO;2-O?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Rajiv L. Sharma, 1998. "Health‐Care Payment Systems: Cost and Quality Incentives—Comment," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 7(1), pages 127-137, March.
    2. Glazer, Jacob & Shmueli, Amir, 1995. "The physician's behavior and equity under a fundholding contract," European Economic Review, Elsevier, vol. 39(3-4), pages 781-785, April.
    3. Lerman, Robert I. & Yitzhaki, Shlomo, 1984. "A note on the calculation and interpretation of the Gini index," Economics Letters, Elsevier, vol. 15(3-4), pages 363-368.
    4. Matsaganis, Manos & Glennerster, Howard, 1994. "The threat of 'cream skimming' in the post-reform NHS," Journal of Health Economics, Elsevier, vol. 13(1), pages 31-60, March.
    5. Wagstaff, Adam, 1991. "QALYs and the equity-efficiency trade-off," Journal of Health Economics, Elsevier, vol. 10(1), pages 21-41, May.
    6. Ma, Ching-to Albert, 1994. "Health Care Payment Systems: Cost and Quality Incentives," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 3(1), pages 93-112, Spring.
    7. Culyer, A. J. & Wagstaff, Adam, 1993. "Equity and equality in health and health care," Journal of Health Economics, Elsevier, vol. 12(4), pages 431-457, December.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Katharina Hauck & Rebecca Shaw & Peter C. Smith, 2002. "Reducing avoidable inequalities in health: a new criterion for setting health care capitation payments," Health Economics, John Wiley & Sons, Ltd., vol. 11(8), pages 667-677, December.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Dolan, Paul & Olsen, Jan Abel, 2001. "Equity in health: the importance of different health streams," Journal of Health Economics, Elsevier, vol. 20(5), pages 823-834, September.
    2. Duncan Mortimer, 2006. "The Value of Thinly Spread QALYs," PharmacoEconomics, Springer, vol. 24(9), pages 845-853, September.
    3. Anand, Paul, 2003. "The integration of claims to health-care: a programming approach," Journal of Health Economics, Elsevier, vol. 22(5), pages 731-745, September.
    4. Paul Dolan & Rebecca Shaw & Aki Tsuchiya & Alan Williams, 2005. "QALY maximisation and people's preferences: a methodological review of the literature," Health Economics, John Wiley & Sons, Ltd., vol. 14(2), pages 197-208, February.
    5. Ching‐to Albert Ma, 1998. "Health‐Care Payment Systems: Cost and Quality Incentives—Reply," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 7(1), pages 139-142, March.
    6. Kuhn, Michael & Siciliani, Luigi, 2007. "Performance Indicators for Quality with Adverse Selection, Gaming and Inequality Aversion," CEPR Discussion Papers 6261, C.E.P.R. Discussion Papers.
    7. Wagstaff, Adam, 2002. "Inequality aversion, health inequalities and health achievement," Journal of Health Economics, Elsevier, vol. 21(4), pages 627-641, July.
    8. repec:dau:papers:123456789/5993 is not listed on IDEAS
    9. Bleichrodt, Han & van Doorslaer, Eddy, 2006. "A welfare economics foundation for health inequality measurement," Journal of Health Economics, Elsevier, vol. 25(5), pages 945-957, September.
    10. François MARECHAL & Michel MOUGEOT, 2004. "Risk sharing and moral hazard under prospective payment to hospitals: how to reimburse services for outlier patients," Cahiers de Recherches Economiques du Département d'économie 04.03, Université de Lausanne, Faculté des HEC, Département d’économie.
    11. Anthony J. Culyer, 2006. "The bogus conflict between efficiency and vertical equity," Health Economics, John Wiley & Sons, Ltd., vol. 15(11), pages 1155-1158, November.
    12. Ottersen, Trygve & Mbilinyi, Deogratius & Maestad, Ottar & Norheim, Ole Frithjof, 2008. "Distribution matters: Equity considerations among health planners in Tanzania," Health Policy, Elsevier, vol. 85(2), pages 218-227, February.
    13. Jones, Philip R. & Cullis, John G., 1996. "Decision making in quasi-markets: A pedagogic analysis," Journal of Health Economics, Elsevier, vol. 15(2), pages 187-208, April.
    14. Waters, Hugh R., 2000. "Measuring equity in access to health care," Social Science & Medicine, Elsevier, vol. 51(4), pages 599-612, August.
    15. Sandiford, P. & Vivas Consuelo, D. & Rouse, P. & Bramley, D., 2018. "The trade-off between equity and efficiency in population health gain: Making it real," Social Science & Medicine, Elsevier, vol. 212(C), pages 136-144.
    16. Katharina Hauck & Rebecca Shaw & Peter C. Smith, 2002. "Reducing avoidable inequalities in health: a new criterion for setting health care capitation payments," Health Economics, John Wiley & Sons, Ltd., vol. 11(8), pages 667-677, December.
    17. Bleichrodt, Han & Doctor, Jason & Stolk, Elly, 2005. "A nonparametric elicitation of the equity-efficiency trade-off in cost-utility analysis," Journal of Health Economics, Elsevier, vol. 24(4), pages 655-678, July.
    18. Alan Williams, 1997. "Intergenerational Equity: An Exploration of the ‘Fair Innings’ Argument," Health Economics, John Wiley & Sons, Ltd., vol. 6(2), pages 117-132, March.
    19. Richardson, Jeff & Sinha, Kompal & Iezzi, Angelo & Maxwell, Aimee, 2012. "Maximising health versus sharing: Measuring preferences for the allocation of the health budget," Social Science & Medicine, Elsevier, vol. 75(8), pages 1351-1361.
    20. Stephen Martin & Nigel Rice & Peter Smith, 1997. "Risk and the GP budget holder," Working Papers 153chedp, Centre for Health Economics, University of York.
    21. Lindholm, Lars & Rosen, Mans & Emmelin, Maria, 1996. "An epidemiological approach towards measuring the trade-off between equity and efficiency in health policy," Health Policy, Elsevier, vol. 35(3), pages 205-216, March.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wly:hlthec:v:8:y:1999:i:4:p:335-343. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://www3.interscience.wiley.com/cgi-bin/jhome/5749 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.