IDEAS home Printed from https://ideas.repec.org/p/hal/journl/halshs-00968734.html
   My bibliography  Save this paper

Payment mechanism and GP self-selection: 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

This paper analyzes the consequences of allowing gatekeeping general practitioners (GPs) to select their payment mechanism. We model GPs’ behavior under the most common payment schemes (capitation and fee for service) and when GPs can select one among them. Our analysis considers GP heterogeneity in terms of both ability and concern for their patients’ health. We show that when the costs of wasteful referrals to costly specialized care are relatively high, fee for service payments are optimal to maximize the expected patients’ health net of treatment costs. Conversely, when the losses associated with failed referrals of severely ill patients are relatively high, we show that either GPs’ self-selection of a payment form or capitation is optimal. Last, we extend our analysis to endogenous effort and to competition among GPs. In both cases, we show that self-selection is never optimal. Copyright Springer Science+Business Media New York 2014
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Marie Allard & Izabela Jelovac & Pierre-Thomas Léger, 2014. "Payment mechanism and GP self-selection: capitation versus fee for service," Post-Print halshs-00968734, HAL.
  • Handle: RePEc:hal:journl:halshs-00968734
    DOI: 10.1007/s10754-014-9143-z
    Note: View the original document on HAL open archive server: https://halshs.archives-ouvertes.fr/halshs-00968734
    as

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    Other versions of this item:

    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. Geir Godager & Tor Iversen & Ching-To Ma, 2009. "Service motives and profit incentives among physicians," International Journal of Health Economics and Management, Springer, vol. 9(1), pages 39-57, March.
    4. Blomqvist, Ake & Leger, Pierre Thomas, 2005. "Information asymmetry, insurance, and the decision to hospitalize," Journal of Health Economics, Elsevier, vol. 24(4), pages 775-793, July.
    5. 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.
    6. Tor Iversen & Hilde Lurås, 2000. "The effect of capitation on GPs' referral decisions," Health Economics, John Wiley & Sons, Ltd., vol. 9(3), pages 199-210.
    7. James M. Malcomson, 2004. "Health Service Gatekeepers," RAND Journal of Economics, The RAND Corporation, vol. 35(2), pages 401-421, Summer.
    8. Sabrina Teyssier, 2008. "Experimental Evidence on Inequity Aversion and Self-Selection between Incentive Contracts," Post-Print halshs-00303727, HAL.
    9. Paula González, 2010. "Gatekeeping versus direct-access when patient information matters," Health Economics, John Wiley & Sons, Ltd., vol. 19(6), pages 730-754.
    10. Josse Delfgaauw, 2007. "Dedicated Doctors: Public and Private Provision of Health Care with Altruistic Physicians," Tinbergen Institute Discussion Papers 07-010/1, Tinbergen Institute, revised 17 Sep 2007.
    11. 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.
    12. Jack, William, 2005. "Purchasing health care services from providers with unknown altruism," Journal of Health Economics, Elsevier, vol. 24(1), pages 73-93, January.
    13. 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.
    14. Gary Biglaiser & Ching-to Albert Ma, 2007. "Moonlighting: public service and private practice," RAND Journal of Economics, RAND Corporation, vol. 38(4), pages 1113-1133, December.
    15. Marie Allard & Pierre Thomas Léger & Lise Rochaix, 2009. "Provider Competition in a Dynamic Setting," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 18(2), pages 457-486, June.
    16. Fortin, Bernard & Jacquemet, Nicolas & Shearer, Bruce, 2010. "Labour Supply, Work Effort and Contract Choice: Theory and Evidence on Physicians," CLSSRN working papers clsrn_admin-2010-30, Vancouver School of Economics, revised 21 Oct 2010.
    17. Tor Iversen & Ching-to Ma, 2011. "Market conditions and general practitioners’ referrals," International Journal of Health Economics and Management, Springer, vol. 11(4), pages 245-265, December.
    18. Doyle Jr., Joseph J. & Ewer, Steven M. & Wagner, Todd H., 2010. "Returns to physician human capital: Evidence from patients randomized to physician teams," Journal of Health Economics, Elsevier, vol. 29(6), pages 866-882, December.
    19. 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.
    20. 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.
    21. Andrew J. Epstein & Jonathan D. Ketcham & Sean Nicholson, 2010. "Specialization and matching in professional services firms," RAND Journal of Economics, RAND Corporation, vol. 41(4), pages 811-834.
    22. Hai Fang & Hong Liu & John Rizzo, 2009. "Has the use of physician gatekeepers declined among HMOs? Evidence from the United States," International Journal of Health Economics and Management, Springer, vol. 9(2), pages 183-195, June.
    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. Izabela Jelovac & Philippe Polomé, 2015. "Incentives to patients versus incentives to health care providers: The users’ perspective," Working Papers 1510, Groupe d'Analyse et de Théorie Economique Lyon St-Étienne (GATE Lyon St-Étienne), Université de Lyon.
    2. 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.
    3. repec:bla:ijhplm:v:32:y:2017:i:3:p:307-316 is not listed on IDEAS

    More about this item

    Keywords

    GPs; Gatekeeping; Payment scheme; Self-selection; Ability; Concern for patients' health;

    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

    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:hal:journl:halshs-00968734. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (CCSD). General contact details of provider: https://hal.archives-ouvertes.fr/ .

    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 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.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.