IDEAS home Printed from https://ideas.repec.org/a/wly/hlthec/v28y2019i10p1166-1178.html
   My bibliography  Save this article

Payment models in primary health care: A driver of the quantity and quality of medical laboratory utilization

Author

Listed:
  • Nadine Chami
  • Arthur Sweetman

Abstract

Physician payment models' incentives regarding many aspects of primary health care are not well understood. We focus on the case of medical laboratory utilization and examine how physicians' laboratory test ordering patterns change following a switch to a blended capitation payment model from one with fee for service enhanced with pay for performance. Also, within blended capitation, we examine differences between traditional staffing and interdisciplinary teams. Using a propensity score weighted fixed‐effects specification to address selection, it is estimated that the switch to capitation leads to a short‐run average of 3% fewer laboratory requisitions per patient. Patients' laboratory utilization also becomes more concentrated with the rostering physician. More importantly, using diabetes‐related laboratory tests as a case study, after joining the blended model, physicians order 3% fewer inappropriate/redundant tests, and the addition of an interdisciplinary care team makes the reduction about 9%. Advances in both continuity and quality seem to be associated with blended capitation.

Suggested Citation

  • Nadine Chami & Arthur Sweetman, 2019. "Payment models in primary health care: A driver of the quantity and quality of medical laboratory utilization," Health Economics, John Wiley & Sons, Ltd., vol. 28(10), pages 1166-1178, October.
  • Handle: RePEc:wly:hlthec:v:28:y:2019:i:10:p:1166-1178
    DOI: 10.1002/hec.3927
    as

    Download full text from publisher

    File URL: https://doi.org/10.1002/hec.3927
    Download Restriction: no

    File URL: https://libkey.io/10.1002/hec.3927?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. Frölich, Markus & Huber, Martin & Wiesenfarth, Manuel, 2017. "The finite sample performance of semi- and non-parametric estimators for treatment effects and policy evaluation," Computational Statistics & Data Analysis, Elsevier, vol. 115(C), pages 91-102.
    2. Alan M. Garber & Jonathan Skinner, 2008. "Is American Health Care Uniquely Inefficient?," Journal of Economic Perspectives, American Economic Association, vol. 22(4), pages 27-50, Fall.
    3. Jeffrey Clemens & Joshua D. Gottlieb, 2014. "Do Physicians' Financial Incentives Affect Medical Treatment and Patient Health?," American Economic Review, American Economic Association, vol. 104(4), pages 1320-1349, April.
    4. Jeffrey M Wooldridge, 2010. "Econometric Analysis of Cross Section and Panel Data," MIT Press Books, The MIT Press, edition 2, volume 1, number 0262232588, December.
    5. Jasmin Kantarevic & Boris Kralj, 2013. "Link Between Pay For Performance Incentives And Physician Payment Mechanisms: Evidence From The Diabetes Management Incentive In Ontario," Health Economics, John Wiley & Sons, Ltd., vol. 22(12), pages 1417-1439, December.
    6. Kantarevic, Jasmin & Kralj, Boris, 2014. "Risk selection and cost shifting in a prospective physician payment system: Evidence from Ontario," Health Policy, Elsevier, vol. 115(2), pages 249-257.
    7. Aas, Eline, 2009. "Pecuniary compensation increases the participation rate in screening for colorectal cancer," HERO Online Working Paper Series 2005:7, University of Oslo, Health Economics Research Programme.
    8. Lorens A. Helmchen & Anthony T. Lo Sasso, 2010. "How sensitive is physician performance to alternative compensation schedules? Evidence from a large network of primary care clinics," Health Economics, John Wiley & Sons, Ltd., vol. 19(11), pages 1300-1317, November.
    9. Arthur Sweetman & Gioia Buckley, 2014. "Ontario's Experiment with Primary Care Reform," SPP Research Papers, The School of Public Policy, University of Calgary, vol. 7(11), April.
    10. Eline Aas, 2009. "Pecuniary compensation increases participation in screening for colorectal cancer," Health Economics, John Wiley & Sons, Ltd., vol. 18(3), pages 337-354, March.
    11. Guido W. Imbens, 2015. "Matching Methods in Practice: Three Examples," Journal of Human Resources, University of Wisconsin Press, vol. 50(2), pages 373-419.
    12. Victoria Barham & Olga Milliken, 2015. "Payment Mechanisms and the Composition of Physician Practices: Balancing Cost‐Containment, Access, and Quality of Care," Health Economics, John Wiley & Sons, Ltd., vol. 24(7), pages 895-906, July.
    13. Franz Hackl & Martin Halla & Michael Hummer & Gerald J. Pruckner, 2015. "The Effectiveness of Health Screening," Health Economics, John Wiley & Sons, Ltd., vol. 24(8), pages 913-935, August.
    14. Jason Abaluck & Leila Agha & Chris Kabrhel & Ali Raja & Arjun Venkatesh, 2016. "The Determinants of Productivity in Medical Testing: Intensity and Allocation of Care," American Economic Review, American Economic Association, vol. 106(12), pages 3730-3764, December.
    15. Kantarevic, Jasmin & Kralj, Boris & Weinkauf, Darrel, 2011. "Enhanced fee-for-service model and physician productivity: Evidence from Family Health Groups in Ontario," Journal of Health Economics, Elsevier, vol. 30(1), pages 99-111, January.
    16. Zhang, Xue & Sweetman, Arthur, 2018. "Blended capitation and incentives: Fee codes inside and outside the capitated basket," Journal of Health Economics, Elsevier, vol. 60(C), pages 16-29.
    17. Marchildon, Gregory P. & Hutchison, Brian, 2016. "Primary care in Ontario, Canada: New proposals after 15 years of reform," Health Policy, Elsevier, vol. 120(7), pages 732-738.
    18. Alan M. Garber & Jonathan Skinner, 2008. "Is American Health Care Uniquely Inefficient?," NBER Working Papers 14257, National Bureau of Economic Research, Inc.
    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. Nibene H. Somé & Rose Anne Devlin & Nirav Mehta & Gregory S. Zaric & Sisira Sarma, 2020. "Stirring the pot: Switching from blended fee‐for‐service to blended capitation models of physician remuneration," Health Economics, John Wiley & Sons, Ltd., vol. 29(11), pages 1435-1455, November.
    2. Piotr Korneta & Magdalena Kludacz-Alessandri & Renata Walczak, 2021. "The Impact of COVID-19 on the Performance of Primary Health Care Service Providers in a Capitation Payment System: A Case Study from Poland," IJERPH, MDPI, vol. 18(4), pages 1-19, February.
    3. Vu, Thyna & Anderson, Kelly K. & Devlin, Rose Anne & Somé, Nibene H. & Sarma, Sisira, 2021. "Physician remuneration schemes, psychiatric hospitalizations and follow-up care: Evidence from blended fee-for-service and capitation models," Social Science & Medicine, Elsevier, vol. 268(C).

    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. Vu, Thyna & Anderson, Kelly K. & Devlin, Rose Anne & Somé, Nibene H. & Sarma, Sisira, 2021. "Physician remuneration schemes, psychiatric hospitalizations and follow-up care: Evidence from blended fee-for-service and capitation models," Social Science & Medicine, Elsevier, vol. 268(C).
    2. Zhang, Xue & Sweetman, Arthur, 2018. "Blended capitation and incentives: Fee codes inside and outside the capitated basket," Journal of Health Economics, Elsevier, vol. 60(C), pages 16-29.
    3. Nibene H. Somé & Rose Anne Devlin & Nirav Mehta & Gregory S. Zaric & Sisira Sarma, 2020. "Stirring the pot: Switching from blended fee‐for‐service to blended capitation models of physician remuneration," Health Economics, John Wiley & Sons, Ltd., vol. 29(11), pages 1435-1455, November.
    4. Somé, N.H. & Devlin, R.A. & Mehta, N. & Zaric, G.S. & Sarma, S., 2020. "Team-based primary care practice and physician's services: Evidence from Family Health Teams in Ontario, Canada," Social Science & Medicine, Elsevier, vol. 264(C).
    5. Nibene H. Somé & Rose Anne Devlin & Nirav Mehta & Greg Zaric & Lihua Li & Salimah Shariff & Bachir Belhadji & Amardeep Thind & Amit Garg & Sisira Sarma, 2019. "Production of physician services under fee‐for‐service and blended fee‐for‐service: Evidence from Ontario, Canada," Health Economics, John Wiley & Sons, Ltd., vol. 28(12), pages 1418-1434, December.
    6. Amitabh Chandra & Douglas O Staiger, 2020. "Identifying Sources of Inefficiency in Healthcare [“The Determinants of Productivity in Medical Testing: Intensity and Allocation of Care,”]," The Quarterly Journal of Economics, Oxford University Press, vol. 135(2), pages 785-843.
    7. Dominic Coey, 2013. "Physician Incentives and Treatment Choices in Heart Attack Management," Discussion Papers 12-027, Stanford Institute for Economic Policy Research.
    8. Atul Gupta & Sabrina T Howell & Constantine Yannelis & Abhinav Gupta, 2021. "Does Private Equity Investment in Healthcare Benefit Patients? Evidence from Nursing Homes," Working Papers 2021-20, Becker Friedman Institute for Research In Economics.
    9. Stoddard Christiana & Stock Wendy A. & Hogenson Elise, 2016. "The Impact of Maternity Leave Laws on Cesarean Delivery," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 16(1), pages 321-364, January.
    10. Piotr Korneta & Magdalena Kludacz-Alessandri & Renata Walczak, 2021. "The Impact of COVID-19 on the Performance of Primary Health Care Service Providers in a Capitation Payment System: A Case Study from Poland," IJERPH, MDPI, vol. 18(4), pages 1-19, February.
    11. Jeannette Brosig‐Koch & Heike Hennig‐Schmidt & Nadja Kairies‐Schwarz & Daniel Wiesen, 2017. "The Effects of Introducing Mixed Payment Systems for Physicians: Experimental Evidence," Health Economics, John Wiley & Sons, Ltd., vol. 26(2), pages 243-262, February.
    12. Jillian Chown, 2020. "Financial Incentives and Professionals’ Work Tasks: The Moderating Effects of Jurisdictional Dominance and Prominence," Organization Science, INFORMS, vol. 31(4), pages 887-908, July.
    13. Rong Fu & Yichen Shen & Haruko Noguchi, 2021. "The best of both worlds? The economic effects of a hybrid fee‐for‐service and prospective payment reimbursement system," Health Economics, John Wiley & Sons, Ltd., vol. 30(3), pages 505-524, March.
    14. Feldman, Maria & Pretnar, Nick, 2023. "The Causal Factors Driving the Rise in U.S. Health-services Prices," MPRA Paper 118169, University Library of Munich, Germany.
    15. Amitabh Chandra & Carrie H. Colla & Jonathan S. Skinner, 2023. "Productivity Variation and Input Misallocation: Evidence from Hospitals," NBER Working Papers 31569, National Bureau of Economic Research, Inc.
    16. Charles Courtemanche & James Marton & Benjamin Ukert & Aaron Yelowitz & Daniela Zapata, 2018. "Early Effects of the Affordable Care Act on Health Care Access, Risky Health Behaviors, and Self‐Assessed Health," Southern Economic Journal, John Wiley & Sons, vol. 84(3), pages 660-691, January.
    17. Anil Aswani & Zuo-Jun Max Shen & Auyon Siddiq, 2019. "Data-Driven Incentive Design in the Medicare Shared Savings Program," Operations Research, INFORMS, vol. 67(4), pages 1002-1026, July.
    18. Jasmin Kantarevic & Boris Kralj, 2016. "Physician Payment Contracts in the Presence of Moral Hazard and Adverse Selection: The Theory and Its Application in Ontario," Health Economics, John Wiley & Sons, Ltd., vol. 25(10), pages 1326-1340, October.
    19. Jagrič, Timotej & Brown, Christine & Boyce, Tammy & Jagrič, Vita, 2021. "The impact of the health-care sector on national economies in selected European countries," Health Policy, Elsevier, vol. 125(1), pages 90-97.
    20. Adolf Kwadzo Dzampe & Shingo Takahashi, 2024. "Financial incentives and health provider behaviour: Evidence from a capitation policy in Ghana," Health Economics, John Wiley & Sons, Ltd., vol. 33(2), pages 333-344, February.

    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:28:y:2019:i:10:p:1166-1178. 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.