Physician Compensation Supply of Medical Services

Does your doc want to be in an ACO?

The answer is likely “It depends.”  To see why this is the case, let us consider the case of some proposed health reforms in Switzerland to force physicians into managed care (MC) networks.  As described in Rischatsch (2015):

In 2012, Switzerland held a referendum…aimed at encouraging the nationwide development of MC networks. Among other changes…the legal text contained that the health care providers organized in physician networks are financially responsible for the medical provision of the network-insured individuals. In other words, the implementation of a budgetary co-responsibility for ambulatory care physicians was intended. The referendum was rejected by a strong majority of voters (76%)…The physician community successfully campaigned against the referendum with the argument that the reform would abolish free physician choice because the reform also intended to impose a higher co-payment for patients that were not treated in a physician network.

Motivated by this referendum, Rischatsch conducts a discrete choice experiment to examine physician preferences.

The discrete choice experiment, completed by 872 physicians in 2011, reveals a strong preference heterogeneity among Swiss ambulatory care physicians. On the one hand, a first group of physicians – mainly general practitioners – is indifferent between working in a network or in independent practice as long as no budgetary responsibility is imposed, but preferences change depending on the design of the reimbursement mechanism. On the other hand, a major share of physicians – mainly specialists with surgical activities – are unwilling to work in a physician network regardless of how the reimbursement scheme is designed.

In summary, there are some physicians who are interested in actively sharing in risk and others–particularly specialists–who have little incentive to do. These are two extremes, but is important to take into account not only patient and payer preferences for managed care (or accountable care organizations), but also the physician preferences as well.


Leave a Reply

Your email address will not be published. Required fields are marked *