How to Improve Patient Care? - An Analysis of Capitation, Fee-for-Service, and Mixed Payment Schemes for Physicians

36 Pages Posted: 18 Jun 2013

See all articles by Jeannette Brosig-Koch

Jeannette Brosig-Koch

University of Duisburg-Essen - Department of Economics and Business Administration

Heike Hennig‐Schmidt

University of Bonn - Laboratory for Experimental Economics

Nadja Kairies-Schwarz

CINCH / University of Duisburg Essen

Daniel Wiesen

University of Cologne

Date Written: April 2, 2013

Abstract

In recent health care reforms, several countries have replaced pure payment schemes for physicians (fee-for-service, capitation) by so-called mixed payment schemes. Until now it is still an unresolved issue whether patients are really better off after these reforms. In this study we compare the effects resulting from pure and mixed incentives for physicians under controlled laboratory conditions. Subjects in the role of physicians choose the quantity of medical services for different patient types. Real patients gain a monetary benefit from subjects’ decisions. Our results reveal that overprovision observed in fee-for-service schemes and underprovision observed in capitation schemes can, in fact, be reduced by mixed incentives. Interestingly, even the presentation of pure incentives as mixed incentives already significantly affects physicians’ behavior. Moreover, the mixed payment schemes generally provide a higher benefit-remuneration ratio than the respective pure payment schemes. Our findings provide some valuable insights for designing health care reforms.

Keywords: Physician incentive schemes; fee-for-service; capitation; mixed payment; laboratory experiment; presentation eff ect; benefi t-remuneration analysis

JEL Classification: C91, I11

Suggested Citation

Brosig-Koch, Jeannette and Henning-Schmidt, Heike and Kairies-Schwarz, Nadja and Wiesen, Daniel, How to Improve Patient Care? - An Analysis of Capitation, Fee-for-Service, and Mixed Payment Schemes for Physicians (April 2, 2013). Available at SSRN: https://ssrn.com/abstract=2278841 or http://dx.doi.org/10.2139/ssrn.2278841

Jeannette Brosig-Koch (Contact Author)

University of Duisburg-Essen - Department of Economics and Business Administration ( email )

Universitätsstr. 9
Essen, 45141
Germany

Heike Henning-Schmidt

University of Bonn - Laboratory for Experimental Economics ( email )

Adenauerallee 24-42
Bonn, 53113
Germany

Nadja Kairies-Schwarz

CINCH / University of Duisburg Essen ( email )

Berliner Platz 6-8
Essen, 47048
Germany

Daniel Wiesen

University of Cologne ( email )

Albertus-Magnus-Platz
Cologne, 50923
Germany

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