Does how primary care physicians are paid impact on their behaviour?

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1 SUPPORT Summary October 2007 Does how primary care physicians are paid impact on their behaviour? Key messages for low and middle-income countries: It is widely believed that the method by which physicians are paid affects their professional behaviour. As a consequence, payment systems have been manipulated in attempts to achieve policy objectives such as improving quality of care, cost containment and recruitment to underserved areas. The main categories of payment systems used to remunerate primary care physicians are fee-for-service, capitation, salary, and mixed systems. With target payments primary care physicians are paid only if they provide a minimum level of care. Only 6 studies were found that compared these different ways of paying primary care physicians. Very low quality evidence suggested that fee-for-service can achieve higher compliance with recommended frequencies of visits. The impact of fee-forservice on the quantity of primary care services is not well documented and is likely to depend on fee-for-service rates. 1 small trial with paediatric residents suggested that salaried primary care physicians may have a lower percentage of visits in excess of a recommended number, fewer scheduled and well child visits, and more emergency visits compared with fee-for-service primary care physicians. 2 studies provided inconclusive evidence of the impact of target payments compared to fee-for-service on immunisation rates. All of the studies were from high-income countries. This SUPPORT Summary is based on the following systematic reviews: Gosden T, Forland F, Kristiansen IS, Sutton M, Leese B, Giuffrida A, Sergison M, Pedersen L. Impact of payment method on behaviour of primary care physicians: a systematic review. J Health Serv Res Policy. 2001;6(1):

2 Background Fee-for-service pays physicians a fee for each item or unit of care they provide. With target payments physicians are paid a lump sum only if a specified target level of service is provided. Under capitation, physicians receive income in the form of a payment for each registered patient. Salaried physicians receive a lump sum salary for a specified number of hours per week. Because fee-for-service and target payments link payment to outputs, they provide an incentive to maximise output (the quantity of care), as long as the fees exceed the personal (own time) and financial costs. With fee-for-service physicians may even provide more services than patients would buy if they were fully informed ( supplier induced demand ). With target payments physicians have an incentive to provide the target level of care only and to provide no care if there is a risk of not meeting the target. Capitation and salaried payment differ in the unit of payment; so the incentives that they provide are different. Salaried payment may not encourage any particular level of care to be provided. Capitation payment may encourage primary care physicians to hold larger patient list sizes to increase income, which may result in a higher workload and shorter consultations. Under capitation primary care physicians may try to attract patients to their practice by creating reputations for a higher quality of, or access to, care. Generally, if physicians respond to these incentives, salaried and capitation payments may encourage cost containment behaviour and result in under-treatment whereas fee-forservice may encourage over-treatment. The impact of these payment systems on patient health status is not clear since both under-treatment and over-treatment may be detrimental. Payment systems may also influence job choice and therefore the recruitment and retention of primary care physicians. For example, primary care physicians may be more likely to accept employment in salaried posts in underserved areas, since salary payment offers a fixed income and hence more financial security. Payment systems may also have different administration costs. Fee-for-service systems might require the most administration since claims have to be made for each item of service, whereas under capitation systems the physician claims a payment for each patient. Salary payment is perhaps administratively the most simple. Summary of findings The review authors found 6 studies of the impact of payment methods on primary care physicians behaviour. There was considerable variation in the quality of reporting, study setting and the range of outcomes measured. Erro! Estilo não definido. 2

3 1) Capitation compared with fee-for-service Capitation compared to fee-for-service for primary care physician * Outcomes Impact No of Physicians (studies) Quality of the evidence (GRADE) Number of primary care physician visits (follow-up: median 6 months) Children in the capitation group had more primary care visits per year and the fee-for-service group had more visits compared with the control group 80 (1) Very low Compliance with recommended periodicity schedule (follow-up: mean 6 months) In the capitation group compliance was lower than in the fee-for-service groups (8 to 12% differences) 80 (1) Very low *Although there were 3 arms in this trial, the reviewers presented 2 comparisons: Capitation versus (old) low rate fee-for-service and (new) high rate fee-for-service versus (old) low rate fee-for-service. The review authors found 1 randomised controlled trial and 1 controlled before-after study. The randomised controlled trial randomised 80 paediatricians into 3 groups (capitation, a (new) high rate fee-for-service group, and a (old) low rate fee-for-service control group) over 6 months. Children in the capitation and the high rate fee-for-service group had more primary care visits compared with the control group. In the capitation group compliance with the recommended periodicity schedule for child health was lower than in the fee-for-service groups. The controlled before-after study compared the impact of introducing fee-for-service in a capitation system with a control group of primary care physicians already paid by capitation with fee-for-service. The number of telephone consultations and diagnostic and curative services rose among primary care physicians 6 months after the introduction of fee-for-service and were still higher after 12 months. Face-to-face consultations were higher after 6 months, but not after 12 months. Referrals to specialists and hospitals, which were not paid for by fees, were lower in the intervention group after 12 months. 2) Mixed capitation compared with fee-for-service 1 controlled before-after study enrolled 116 physicians (77 capitation and fee-for-service and 39 fee-for-service). After four years there were no statistically significant differences in admission rates or days in hospital between the two groups. 3) Salary compared with fee-for-service 1 randomised controlled trial randomised 18 paediatric residents to salary (10) or fee-forservice (8) with a follow-up of 9 months. The average number of patients enrolled per primary care physician was higher in salaried compared with fee-for-service primary care Erro! Estilo não definido. 3

4 physicians (27 per cent relative difference). There were no statistically significant differences between salaried and fee-for-service primary care physicians in the average number of initial or follow-up visits per patient. However, salaried primary care physicians had a lower percentage of visits in excess of a recommended number compared with fee-for-service primary care physicians. The average number of emergency visits per patient was higher for salaried compared with fee-for-service primary care physicians (a relative difference of 83.3 per cent), whereas the salaried primary care physicians carried out fewer scheduled and well child visits per enrolled patient. Salaried primary care physicians attended a lower percentage of visits with their own patients (a measure of continuity of care) compared with fee-for-service primary care physicians. The only statistically significant difference reported across four domains of patient satisfaction was for access, which favoured the salaried primary care physicians. 4) Target payments compared with fee-for-service Target payment compared to fee-for-service for primary care physicians Outcomes Impact No of Physicians (studies) Quality of the evidence (GRADE) Rate of influenza vaccination (follow-up: median 1 year) The physicians receiving target payments had an influenza vaccination rate 9.4% higher than the fee-for-service group, but this was not statistically significant. 54 (1) Low 1 randomised controlled trial randomised 54 practices in the US to target payment (27) or fee-for-service (27) with 1 year of follow-up. There was not a statistically significant difference in the influenza vaccination rate between physicians receiving fees plus target payments (10-20% reimbursement per shot if they immunised 70-80% of the eligible population) and the control group. The interrupted time series analysis (313 primary care physicians in the UK, 20 months of follow up) found no evidence that the overall linear trend in immunisation rates had changed as a result of the target payments. Relevance of the review for low and middleincome countries Applicability: The impacts of financial incentives are likely to depend on clinical, demographic and organisational factors, as well as the magnitude of the incentives. This systematic review found scant evidence of the impacts of different ways of remunerating primary care physicians, all of it from high-income countries. Differences in payment systems and infrastructure may further limit the applicability of this evidence to low and middle-income countries. For example changing from salary or capitation to fee-for- Erro! Estilo não definido. 4

5 service might require more sophisticated information systems. Equity: The potential impacts of different payment systems on equity are largely unevaluated. For example, capitation rates can be adjusted to provide incentives to disadvantaged populations and target payments can provide incentives for providing services to disadvantaged populations, but the impacts of such incentives appear not to have been evaluated. Scaling up: Changes in how primary care physicians are paid may incur costs (or savings) related to the size of the fees that are paid, any resulting changes in the quantity of services provided, and administrative costs. The impact of changes in payment methods on the quantity and quality of services provided and the costs associated with these are difficult to predict and could limit the sustainability of any major changes. Comments: Given the paucity of evidence of the impacts of alternative payment systems, changes should be pilot tested and their impacts rigorously evaluated, ideally using randomised designs and measuring impacts on equity, costs, the quality of care and patient satisfaction, as well as on the quantity of services provided. Erro! Estilo não definido. 5

6 Characteristics of the Review Objective: To assess the effects of strategies to integrate primary health care services. Interventions What the review authors searched for Comparisons of fee-forservice, capitation, salary, mixed remuneration systems, and target payments. What the review authors found Capitation payment versus fee-for-service (1 randomised controlled trial, 1 controlled before-after study) Salaried payment versus fee-for-service (1 randomised controlled trial) Mixed capitation versus feefor-service (1 controlled before-after study) Comments Target payment versus feefor-service (1 randomised controlled trial, 1 interrupted time series analysis) Participants Primary care physicians GPs (3 studies) Paediatricians (2 studies) Primary care physicians (1 study) Settings Primary healthcare settings USA (3 studies) Canada (1 study) UK (1 study) Denmark (1 study) Outcomes Objective measurement of: Health professional outcomes Health professional process Health services utilisation Patient outcomes Healthcare costs Equity of care Primary care physician satisfaction Date of most recent search: 1997 Enrolled patients (1 study) Primary care physician visits (3) Compliance with recommended frequency of visits (2) Continuity (1) Service utilisation(1) Referrals (2) ER visits (2) Hospitalisation (2) Patient satisfaction (1) Immunisation coverage (2) A wide variety of outcome measures were reported with different lengths of follow-up. None of the studies reported quality of care (other than immunisation coverage), patient outcomes (other than satisfaction), healthcare costs or equity of care. Limitations: This is a good quality systematic review but the included studies have major limitations. Erro! Estilo não definido. 6

7 About this summary References This SUPPORT Summary is based on the following systematic reviews: Gosden T, Forland F, Kristiansen IS, Sutton M, Leese B, Giuffrida A, Sergison M, Pedersen L. Impact of payment method on behaviour of primary care physicians: a systematic review. J Health Serv Res Policy. 2001;6(1): Gosden T, Forland F, Kristiansen IS, Sutton M, Leese B, Giuffrida A, Sergison M, Pedersen L. Capitation, salary, fee-for-service and mixed systems of payment: effects on the behaviour of primary care physicians. Cochrane Database of Systematic Reviews 2000, Issue 3. Art. No.: CD DOI: / CD Giuffrida A, Gosden T, Forland F, Kristiansen IS, SergisonM, Leese B, Pedersen L, Sutton M. Target payments in primary care: effects on professional practice and health care outcomes. Cochrane Database of Systematic Reviews 1999, Issue 4. Art. No.: CD DOI: / CD Summary prepared by: Sebastián García Martí and Agustín Ciapponi, September Additional information Glossary of terms used in this report: Receive notices of new SUPPORT summaries: Background references on this topic: Who is behind SUPPORT summaries? SUPPORT an international collaboration funded by the EU 6 th Framework Programme to support policy relevant reviews and trials to inform decisions about maternal and child health in low and middleincome countries. Additional information, including explanations of terms used in these summaries, can be found on the SUPPORT website: The Alliance for Health Policy and Systems Research (AHPSR) is an international collaboration aiming to promote the generation and use of health policy and systems research as a means to improve the health systems of developing countries. The Cochrane Effective Practice and Organisation of Care Group (EPOC) is a Collaborative Review Group of the Cochrane Collaboration: an international organisation that aims to help people make well informed decisions about health care by preparing, maintaining and ensuring the accessibility of systematic reviews of the effects of health care interventions. Erro! Estilo não definido. 7

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