Do Physicians Respond to Additional Capitation Payments in Mixed Remuneration Schemes?

Abstract

Mixed remuneration schemes with capitation and fee-for-service (FFS) payments hold financial incentives to add patients to the list and provide services to listed patients. However, as patients with complex needs tend to require longer consultations there is a risk of inequality in access if fees are not adjusted to patient characteristics. In this paper, we assess a natural experiment introducing additional capitation for GPs with a high share of complex patients (moderate scheme) and for GPs in certain geographical areas (intensive scheme). GPs are eligible if the complexity of their listed patients exceeds a threshold, but as the scheme is subject to a national budget constraint, some eligible general practitioners (GPs) are left without additional payment. For the most favored GPs, the reform distributed additional capitation at 8% of the total baseline income. We study the effects on the number of patients per GP and the number of services per patient, applying difference-in-difference (DiD) models. For both schemes (moderate and intensive), we find tendencies of reductions in the number of patients served and the level of service provision per patient. This also holds for complex patients indicating that the reform did not improve equity in access. The effect on income showed a 2.5% increase in the first follow-up year but the effect became insignificant in the second year after the reform. We interpret this result as a sign that GPs trade income increases with leisure as suggested by the target income hypothesis.