Effects of different remuneration methods on general medical practice: a comparison of capitation and fee-for-service payment

Abstract

There are severe methodological problems to be overcome in comparing the effects of different payment methods on general medical practice, not least because there are many factors which affect the pattern of service delivery. Also, the reliability and comparability of data may be poor. This article emphasises that the effects of capitation and fee-for-service payment methods on general medical practice should be carefully compared with factual information, especially numerical data. In so doing, it is shown that there are supporting data for the contention that a fee-for-service system encourages more consultations, more diagnostic tests, higher drug use, higher surgical rates and higher costs than a capitation system. On the other hand, a capitation system may lead doctors to hastier and less courteous care than a fee-for-service system. The geographical distribution of general practitioners (GPs) may be more even, and continuity of care may be better maintained, under a capitation system; but there may be excessive referrals from GPs to specialists under this system of payment. There is no evidence for the contention that a capitation system encourages preventive medicine, but the financial coverage for preventive procedures does encourage such procedures.