Physician payment: incentives change with supply
CMAJ 1997;157:872
The articles "Primary care reform: Is it time for population-based funding?" (CMAJ 1997;157:43-40 [full text / résumé], by Dr. David Mowat, and "A new primary care rostering and capitation system in Norway: Lessons for Canada?" (CMAJ 1997;157:45-50 [full text / résumé]), by Drs. Truls Østbye and Steinar Hunskaar, examine different physician payment mechanisms.
Each of the recognized methods of payment results in different incentives, and these change when a certain line is crossed. The location of this line depends on whether there are too many or too few physicians in the particular market, or, more accurately, on whether the physicians involved believe that there are too many or too few of them in the market.
Fee-for-service payment provides incentives for physicians to work hard and efficiently when there are too few physicians, but when there are too many physicians with too little work it encourages the generation of unnecessary work. Capitation-based payment encourages patient satisfaction as long as the physicians are competing for patients; however, as happened in Britain, once there are too few physicians, all with full lists, this payment system encourages physicians to reduce work to a minimum. The effect of salary payment is less clear, but it goes something like this: if there are too few physicians in the system, the incentive is to reduce work to the minimum; whereas, if there are physicians trying to get into the salaried positions, the physician has to work hard to remain valuable to the employer.
I do not mean to suggest that physicians respond only to these incentives, but it should be recognized that incentives exist and that they modify behaviour.
The success or failure of a particular system in a particular environment needs to be examined in the light of the physicians' belief concerning whether there are too many or too few physicians and their sense of security within the system. It also means that it is probably impossible to design a single system that will work optimally in both a rural and a metropolitan environment, let alone one that will work equitably across Canada.
Ben R. Wilkinson, MB, MBA
Nanaimo, BC
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