FFS vs. Capitation Reimbursement: Responses by Physicians and Medical Students

How do people respond to financial incentives?  In the medical world, physicians often are paid fee-for-service (FFS) or capitation.  Physicians receiving FFS reimbursement receive additional compensation for each additional service they do.  For instance, physicians under FFS receive twice as much compensation for 2 office visits as they would for 1 office visit.  On the other hand,…

Physician Payments in the 1990s

One of my favorite health economists and bloggers is Austin Frakt of the Incidental Economist.  In a recent paper, he examines whether new Health Reform provisions have learned from the mistakes in the 1990s from shifting provider reimbursement to a capitation based-system.  To find the answer, you’ll need to read his commentary (with Rick Mayes)…

Do doctors tailor the care they provide based on the patient’s health plan?

Many studies (including my own) have shown that physicians paid via capitation  perform fewer services than those paid via fee-for-service (FFS).  In the current health care world, however, most physicians treat patients from a variety of different insurance systems (notable exceptions are doctors working at Kaiser and the VA). Two important research questions come to…

Cochrane Review: The effect of capitation, fee-for-service (FFS) and mixed payment systems on primary care physician behavior

Primary care physicians can be compensated in a number of ways. The most popular are capitation, fee-for-service, salary, or some mixture of the three. But how does the physician compensation method affect care levels? This is the question Gosden et al. (2000) try to answer in their Cochrane review. The authors search the literature for…