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Physicians self selection of a payment mechanism: Capitation versus fee-for-service

Author

Listed:
  • Marie Allard

    (HEC Montréal - HEC Montréal)

  • Izabela Jelovac

    (GATE Lyon Saint-Étienne - Groupe d'analyse et de théorie économique - ENS Lyon - École normale supérieure - Lyon - UL2 - Université Lumière - Lyon 2 - UCBL - Université Claude Bernard Lyon 1 - Université de Lyon - UJM - Université Jean Monnet [Saint-Étienne] - Université de Lyon - CNRS - Centre National de la Recherche Scientifique)

  • Pierre-Thomas Léger

    (HEC Montréal - HEC Montréal, CIRANO - Centre interuniversitaire de recherche en analyse des organisations - UQAM - Université du Québec à Montréal , CIRPEE - Centre interuniversitaire sur le risque, les politiques économiques et l'emploi - Centre Interuniversitaire sur le Risque, les Politiques Economiques et l'Emploi)

Abstract

The main question raised in this paper is whether GPs should self select their paymentmechanism or not. To answer it, we model GPs' behavior under the most commonpayment schemes (capitation and fee-for-service) and when GPs can select one amongthose. Our analysis considers GPs heterogeneity in terms of both ability and sense ofprofessional duty. We conclude that when savings on specialists costs are the mainconcern of a regulator, GPs should be paid on a fee-for-service basis. Instead, whenfailures to identify severe conditions are the main concern, then payment self selection byGPs can be optimal.

Suggested Citation

  • Marie Allard & Izabela Jelovac & Pierre-Thomas Léger, 2010. "Physicians self selection of a payment mechanism: Capitation versus fee-for-service," Post-Print halshs-00523370, HAL.
  • Handle: RePEc:hal:journl:halshs-00523370
    Note: View the original document on HAL open archive server: https://halshs.archives-ouvertes.fr/halshs-00523370
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    References listed on IDEAS

    as
    1. Brekke, Kurt R. & Nuscheler, Robert & Straume, Odd Rune, 2007. "Gatekeeping in health care," Journal of Health Economics, Elsevier, vol. 26(1), pages 149-170, January.
    2. Rosella LEVAGGI & Lise ROCHAIX, 2007. "Exit, Choice Or Loyalty: Patient Driven Competition In Primary Care," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 78(4), pages 501-535, December.
    3. Dumont, Etienne & Fortin, Bernard & Jacquemet, Nicolas & Shearer, Bruce, 2008. "Physicians' multitasking and incentives: Empirical evidence from a natural experiment," Journal of Health Economics, Elsevier, vol. 27(6), pages 1436-1450, December.
    4. Sabrina Teyssier, 2008. "Experimental Evidence on Inequity Aversion and Self-Selection between Incentive Contracts," Post-Print halshs-00303727, HAL.
    5. Paula González, 2010. "Gatekeeping versus direct-access when patient information matters," Health Economics, John Wiley & Sons, Ltd., vol. 19(6), pages 730-754.
    6. Allard, Marie & Jelovac, Izabela & Léger, Pierre Thomas, 2011. "Treatment and referral decisions under different physician payment mechanisms," Journal of Health Economics, Elsevier, vol. 30(5), pages 880-893.
    7. Bernard Fortin & Nicolas Jacquemet & Bruce Shearer, 2008. "Policy Analysis in the health-services market: accounting for quality and quantity," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00305309, HAL.
    8. McGuire, Thomas G., 2000. "Physician agency," Handbook of Health Economics,in: A. J. Culyer & J. P. Newhouse (ed.), Handbook of Health Economics, edition 1, volume 1, chapter 9, pages 461-536 Elsevier.
    9. Marinoso, Begona Garcia & Jelovac, Izabela, 2003. "GPs' payment contracts and their referral practice," Journal of Health Economics, Elsevier, vol. 22(4), pages 617-635, July.
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    1. Allard, Marie & Jelovac, Izabela & Léger, Pierre Thomas, 2011. "Treatment and referral decisions under different physician payment mechanisms," Journal of Health Economics, Elsevier, vol. 30(5), pages 880-893.

    More about this item

    Keywords

    GPs; gatekeeping; payment scheme; self selection; ability; professional duty;

    JEL classification:

    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • J33 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Compensation Packages; Payment Methods

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