Fee-for-service funding of primary care: Adverse side effects for patients and society?
We aim to improve our understanding of how GPs respond to the incentives in the fee-for service system, and what consequences this has for their patients.
About 90% of Norwegian general practitioners (GPs) are paid by a fee-for-service model, whereas the remaining 10% mainly work for a fixed salary. Outside primary health care, fee-for-service is an uncommon financing model in public sector.
Fee-for-service models are commonly expected to promote GPs' productivity.
There is some evidence however that the fee-for-service model increases the number of performed procedures without improving public health, and it may even cause overutilization of health care and certain bad practices. Evidence is however mixed and limited.The current fee-for-service model incentivizes short consultations with each patient and the conducting of many procedures. It also incentivizes avoiding confrontations with the patient as this increase the duration of consultations and possibly the risk of the patient switching to another GP. Dissatisfied patients may also share their experience with others.
GPs have a role as gatekeepers on behalf of society. For example, GPs are expected to restrict access to antibiotics and medication that may cause dependency. They are also expected to reduce welfare dependency by restricting access to long-term sickness absence.
Some GPs may be more sensitive to financial incentives than others. It is an empirical question to what extent some GPs aim to maximize profit by adapting their practice to the incentives, and whether this is harmful for patients. It is also an empirical question if GPs on fixed-salaries differ from GPs on a fee-for-service model in the above.
We aim to improve our understanding of how GPs respond to the incentives in the fee-for service system, and what consequences this has for their patients. This knowledge will inform future reforms and evaluations of the welfare system, and may be key in reducing the unnecessary prescription of antibiotics, sedatives and tranquilizers, and it may be key for health authorities in reducing welfare dependency.
Arnstein Mykletun, Norwegian Institute of Public Health
Kristian Amundsen Østby, Norwegian Institute of Public Health
Fartein Ask Torvik, Norwegian Institute of Public Health
Eivor Hovde Hoff, Det helsevitenskapelige fakultet, UiT The Arctic University of Norway
Kristian Bandlien Kraft, Health Services Research, Norwegian Institute of Public Health
Simen Markussen, Ragnar Frisch Centre for Economic Research