In Norway, each primary physician assumes medical responsibility for a well-defined population of patients. Norwegian physicians receive approximately NOK 300 (~$50 USD) per patient on their list so their income is largely determined by list size. This capitated payment is supposed to make up 30% of primary physician income with the remainder coming from FFS payments for medical services rendered.
A paper by Grytten and Sørenson (JHE 2007) hypothesizes that physicians with longer lists will make more money, but will ration consultations. Those with a short list are hypothesized to increase service production in order to increase FFS payments. The hypothesis that physicians with short lists will increase medical care service provision is named the inducement hypothesis. This logic can be justified in a number of ways. Income targeting and profit maximizing all could justify this behavior. Similarly, an altruistic doctor may decide to shorten his list if his patient case-mix is sicker than average and each patient needs more of his time. Thus, the exact vehicle driving this prediction is not clear.
The authors end up finding that: “…long lists do not lead to rationing, and short lists do not increase service production per consultation.” The authors claim that this finding may explained if “…physicians are guided by professional ethical and medical norms, and that they do not allow self-interest to influence their service production.”
Could the explanation be that simple? The authors have data on the length of the patient consultation, but not the quality of care given during the visit. Without information regarding the quality of care, coming to a convincing conclusion about the inducement hypothesis will be difficult.