Mixed Payment and Mixed Objectives: Insights from the Ownership Structure in Swedish Primary Care

The literature on ownership in healthcare lacks evidence from the primary care sector, where the traditional small-scale business model is increasingly complemented by larger practices owned by corporations or the government. We explore the role of ownership in primary care in relation to a core theme in health economics -- the balance between fee-for-service and capitation remuneration. We study heterogeneous responses to a Swedish policy reform reducing the fee for GP visits and increasing the capitation share in a mixed payment system. In this study context, publicly owned practices, for-profit practices owned by physicians, and practices belonging to chains owned by non-physician investors contract on the same terms. Our difference-in-difference estimates reveal heterogeneity consistent with the notion that profit motives are stronger in externally owned practices: While the number of GP visits generally fell after the reform, the reduction was more marked for practices belonging to chains. The reduction did not benefit remaining patients, as indicated by patient experience measures. The strengthened incentive to expand the list of registered patients did not have heterogeneous effects. Our results suggest that the design of financial incentives ought to consider that the provider objectives depends on the ownership structure.