Does the way physicians are paid influence the way they practice? The case of Canadian family physicians' work activity

Objectives To investigate the impact of the mode of remuneration on the work activities of Canadian family physicians on: (a) direct patient care in office/clinic, (b) direct patient care in other settings and (c) indirect patient care.Methods Because the mode of remuneration is potentially endogenous to the work activities undertaken by family physicians, an instrumental variable estimation procedure is considered. We also account for the fact that the determination of the allocation of time to different activities by physicians may be undertaken simultaneously. To this end, we estimate a system of work activity equations and allow for correlated errors.Results Our results show that the mode of remuneration has little effect on the total hours worked after accounting for the endogeneity of remuneration schemes; however it does affect the allocation of time to different activities. We find that physicians working in non-fee-for-service remuneration schemes spend fewer hours on direct patient care in the office/clinic, but devote more hours to direct patient care in other settings, and more hours on indirect patient care.Conclusions Canadian family physicians working in non-fee-for-service settings spend fewer hours on direct patient care in the office/clinic, but devote more hours to direct patient care in other settings and devote more hours to indirect patient care. The allocation of time in non-fee-for-service practices may have some implications for quality improvement.