Skip to main page content
U.S. flag

An official website of the United States government

Dot gov

The .gov means it’s official.
Federal government websites often end in .gov or .mil. Before sharing sensitive information, make sure you’re on a federal government site.

Https

The site is secure.
The https:// ensures that you are connecting to the official website and that any information you provide is encrypted and transmitted securely.

Access keys NCBI Homepage MyNCBI Homepage Main Content Main Navigation
. 2000;2000(3):CD002215.
doi: 10.1002/14651858.CD002215.

Capitation, salary, fee-for-service and mixed systems of payment: effects on the behaviour of primary care physicians

T Gosden  1 , F Forland, I S Kristiansen, M Sutton, B Leese, A Giuffrida, M Sergison, L Pedersen
Affiliations

Capitation, salary, fee-for-service and mixed systems of payment: effects on the behaviour of primary care physicians

T Gosden et al. Cochrane Database Syst Rev. 2000.

Abstract

Background: It is widely believed that the method of payment of physicians may affect their clinical behaviour. Although payment systems may be used to achieve policy objectives (e.g. cost containment or improved quality of care), little is known about the effects of different payment systems in achieving these objectives.

Objectives: To evaluate the impact of different methods of payment (capitation, salary, fee for service and mixed systems of payment) on the clinical behaviour of primary care physicians (PCPs).

Search strategy: We searched the Cochrane Effective Practice and Organisation of Care Group specialised register; the Cochrane Controlled Trials Register; MEDLINE (1966 to October 1997); BIDS EMBASE (1980 to October 1997); BIDS ISI (1981 to October 1997); EconLit (1969 to October 1997); HealthStar (1975 to October 1997) Helmis (1984 to October 1997); health economics discussion paper series of the Universities of York, Aberdeen, Sheffield, Bristol, Brunel, and McMaster; Swedish Institute of Health Economics; RAND corporation; and reference lists of articles.

Selection criteria: Randomised trials, controlled before and after studies and interrupted time series analyses of interventions comparing the impact of capitation, salary, fee for service (FFS) and mixed systems of payment on primary care physician satisfaction with working environment; cost and quantity of care; type and pattern of care; equity of care; and patient health status and satisfaction.

Data collection and analysis: Two reviewers independently extracted data and assessed study quality.

Main results: Four studies were included involving 640 primary care physicians and more than 6400 patients. There was considerable variation in study setting and the range of outcomes measured. FFS resulted in more primary care visits/contacts, visits to specialists and diagnostic and curative services but fewer hospital referrals and repeat prescriptions compared with capitation. Compliance with a recommended number of visits was higher under FFS compared with capitation payment. FFS resulted in more patient visits, greater continuity of care, higher compliance with a recommended number of visits, but patients were less satisfied with access to their physician compared with salaried payment.

Reviewer's conclusions: It is noteworthy that so few studies met the inclusion criteria. There is some evidence to suggest that the method of payment of primary care physicians affects their behaviour, but the findings' generalisability is unknown. More evaluations of the effect of payment systems on PCP behaviour are needed, especially in terms of the relative impact of salary versus capitation payments.

PubMed Disclaimer

Conflict of interest statement

None known.

References

References to studies included in this review

Davidson 1992 {published data only}
    1. Davidson SM, Manheim LM, Werner SM, Hohlen MM, Yudkowsky BK, Fleming GV. Prepayment with office‐based physicians in publicly funded programs: results from the Children's Medicaid Program. Pediatrics 1992;89(4 Pt 2):761‐7. [PUBMED: 1557274] - PubMed
    1. Hohlen MM, Manheim LM, Fleming GV, Davidson SM, Yudkowsky BK, Werner SM, et al. Access to office‐based physicians under capitation reimbursement and Medicaid case management. Findings from the Children's Medicaid Program. Medical Care 1990;28(1):59‐68. [PUBMED: 2404168] - PubMed
Hickson 1987 {published data only}
    1. Hickson GB, Altemeier WA, Perrin JM. Physician reimbursement by salary or fee‐for‐service: effect on physician practice behavior in a randomized prospective study. Pediatrics 1987;80(3):344‐50. [PUBMED: 3627885] - PubMed
Hutchison 1996 {published data only}
    1. Hutchison B, Birch S, Hurley J, Lomas J, Stratford‐Devai F. Do physician‐payment mechanisms affect hospital utilisation? A study of Health Service Organisations in Ontario. Canadian Medical Association Journal 1996;154(5):653‐61. [PUBMED: 8603321] - PMC - PubMed
    1. Hutchison B, Birch S, Hurley J, Lomas J, Stratford‐Devai F. Effect of a financial incentive to reduce hospital utilisation in capitated primary care practice. CHEPA working paper series 1994. [WorldCat OCLC: 70392893]
Krasnik 1990 {published data only}
    1. Flierman H, Groenewegen P. Introducing fees for services with professional uncertainty. Health Care Financing Review 1992;14(1):107‐15. [PUBMED: 10124433 ] - PMC - PubMed
    1. Krasnik A, Gottschau A. Doctor and patient characteristics as modifiers of the effect of a changing remuneration system in general practice. Danish Medical Bulletin 1993;40(3):380‐2. [PUBMED: 8339608] - PubMed
    1. Krasnik A, Groenewegen PP, Pedersen PA, Scholten P, Mooney G, Gottschau A, et al. Changing remuneration systems: effects on activity in general practice. BMJ 1990;300(6741):1698‐701. [PUBMED: 2390552] - PMC - PubMed

References to studies excluded from this review

Bonham 1987 {published data only}
    1. Bonham GS, Barber GM. Use of health care before and during Citicare. Medical Care 1987;25(2):111‐9. [PUBMED: 3546969] - PubMed
Burkowitz 1995 {published data only}
    1. Burkowitz J, Preissig AB, Wehner I, Fischer GC. Effects of 2 reimbursement models on house calls by general practitioners [Auswirkungen zweier Vergutungsmodelle auf Hausbesuche von Allgemeinmedizinern]. Gesundheitswesen 1995;57(12):782‐5. [PUBMED: 8580606] - PubMed
Burns 1998 {published data only}
    1. Burns T, Cohen A. Item‐of‐service payments for general practitioner care of severely mentally ill persons: does the money matter?. British Journal of General Practice 1998;48(432):1415‐6. [PUBMED: 9800401] - PMC - PubMed
Gruesser 1993 {published data only}
    1. Gruesser M, Bott U, Ellermann P, Kronsbein P, Joergens V. Evaluation of a structured treatment and teaching program for non‐insulin‐treated type II diabetic outpatients in Germany after the nationwide introduction of reimbursement policy for physicians. Diabetes Care 1993;16(9):1268‐75. [PUBMED: 8404431] - PubMed
Kelly 1996 {published data only}
    1. Kelly MH, Murray TS. Motivation of general practitioners attending postgraduate education. British Journal of General Practice 1996;46(407):353‐6. [PUBMED: 8983254 ] - PMC - PubMed
Langham 1995 {published data only}
    1. Langham S, Gillam S, Thorogood M. The carrot, the stick and the general practitioner: how have changes in financial incentives affected health promotion activity in general practice?. British Journal of General Practice 1995;45(401):665‐8. [PUBMED: 8745865 ] - PMC - PubMed
Leibowitz 1992 {published data only}
    1. Leibowitz A, Buchanan J, Mann J. A Randomized Trial to Evaluate the Effectiveness of a Medicaid HMO. Journal of Health Economics 1992;11(3):235‐57. [PUBMED: 10122538] - PubMed
Lowy 1993 {published data only}
    1. Lowy A, Brazier J, Fall M, Thomas K, Jones N, Williams BT. Minor surgery by general practitioners under the 1990 contract: effects on hospital workload. BMJ 1993;307(6901):413‐7. [PUBMED: 8374452] - PMC - PubMed
Murray 1997 {published data only}
    1. Murray R, Campbell L. Finance, not learning needs, makes general practitioners attend courses: a database survey. BMJ 1997;315(7104):353. [PUBMED: 9270459] - PMC - PubMed
Perkoff 1976 {published data only}
    1. Perkoff G, Kahn L, Mackie A. Medical care utilisation in an experimental prepaid group practice model in a university medical centre. Medical Care 1974;12(6):471‐85. [PUBMED: 4828730] - PubMed
    1. Perkoff GT, Kahn L, Haas PJ. The effects of an experimental prepaid group practice on medical care utilization and cost. Medical Care 1976;14(5):432‐49. [PUBMED: 1271883 ] - PubMed
Stearns 1992 {published data only}
    1. Stearns SC, Wolfe BL, Kindig DA. Physician responses to fee‐for‐service and capitation payment. Inquiry 1992;29(4):416‐25. [PUBMED: 1473865] - PubMed
Vohlonen 1989 {published data only}
    1. Vohlonen I (ed). Personal doctor program: data, results and conclusions of the Finnish study. Helsinki: National Board of Health, 1989. [WorldCat OCLC: 57846329]
    1. Vohlonen I, Pekurinen M, Saltman R. Re‐organizing primary medical care in Finland: the personal doctor program. Health Policy 1989;13(1):65‐79. [PUBMED: 10296156] - PubMed

References to ongoing studies

Hutchison {published data only}
    1. Comparison of health care utilisation and costs in HSO and fee for service practice. Ongoing study Starting date of trial not provided. Contact author for more information.

Additional references

Donaldson 1989
    1. Donaldson C, Gerard K. Paying general practitioners: shedding light on the review of health services. Journal of the Royal College of General Practitioners 1989;39(320):114‐7. [PUBMED: 2555489 ] - PMC - PubMed
Evans 1974
    1. Evans R. Supplier induced demand: some empirical evidence and implications. In: Perlman M editor(s). The Economics of Health and Medical Care: proceedings of a conference held by the International Economic Association at Tokyo. New York: Stockton Press, 1974:162‐73. [WorldCat OCLC: 14987386]
Giuffrida 2000
    1. Giuffrida A, Gosden T, Forland F, Kristiansen I, Sergison M, Leese B, et al. Target payments in primary care: effects on professional practice and health care outcomes (Cochrane Review). Cochrane Database of Systematic Reviews 2000, Issue 3. [DOI: 10.1002/14651858.CD000531; PUBMED: 10908475] - DOI - PMC - PubMed
Gosden 1999
    1. Gosden T, Pedersen L, Torgerson D. How should we pay doctors? A systematic review of salary payments and their effect on doctor behaviour. Quarterly Journal of Medicine 1999;92(1):47‐55. [PUBMED: 10209672] - PubMed
Hillman 1992
    1. Hillman A, Welch P, Pauly M. Contractual arrangements between HMOs and Primary Care Physicians: three tiered HMOs and risk pools. Medical Care 1992;30(2):136‐48. [PUBMED: 1736019] - PubMed
Matsaganis 1994
    1. Matsaganis M, Glennerster H. The threat of 'cream skimming' in the post‐reform NHS. Journal of Health Economics 1994;13(1):31‐60. [PUBMED: 10134438] - PubMed
Maynard 1986
    1. Maynard A, Marinker M, Gray DP. The doctor, the patient, and their contract. III. Alternative contracts: are they viable?. British Medical Journal Clinical Research Ed 1986;292(6533):1438‐40. [PUBMED: 3087461 ] - PMC - PubMed
Miller 1994
    1. Miller RH, Luft HS. Managed care plan performance since 1980. A literature analysis. JAMA 1994;271(19):1512‐9. [PUBMED: 8176832] - PubMed
Rosen 1989
    1. Rosen B. Professional reimbursement and professional behavior: emerging issues and research challenges. Social Science and Medicine 1989;29(3):455‐62. [PUBMED: 2762870] - PubMed
Scott 1995
    1. Scott A, Hall J. Evaluating the effects of GP remuneration. Health Policy 1995;31(3):183‐95. [PUBMED: 10142615] - PubMed
Shimmura 1988
    1. Shimmura K. Effects of different remuneration methods on general medical practice: a comparison of capitation and fee‐for‐service payment. International Journal of Health Planning and Management 1988;3:245‐58. [PUBMED: 10318242] - PubMed
Vanselow 1995
    1. Vanselow NA, Donaldson MS, Yordy KD. From the Institute of Medicine. A new definition of primary care. JAMA 1995;273(3):192. [PUBMED: 7807653] - PubMed
Woodward 1984
    1. Woodward R, Warren‐Bolton F. Considering the effects of financial incentives and professional ethics on 'appropriate' medical care. Journal of Health Economics 1984;3(3):223‐37. [PUBMED: 10269802 ] - PubMed

References to other published versions of this review

Gosden 2001
    1. Gosden T, Forland F, Kristiansen IS, Sutton M, Leese B, Giuffrida A, et al. Impact of payment method on behaviour of primary care physicians: a systematic review. Journal of Health Services Research and Policy 2001;6(1):44‐55. [PUBMED: 11219360] - PubMed

Publication types

LinkOut - more resources