Paying for Primary Care: The Factors Associated with Physician Self-selection into Payment Models

Abstract

To determine the factors associated with primary care physician self-selection into different payment models, we used a panel of eight waves of administrative data for all primary care physicians who practiced in Ontario between 2003/2004 and 2010/2011. We used a mixed effects logistic regression model to estimate physicians' choice of three alternative payment models: fee for service, enhanced fee for service, and blended capitation. We found that primary care physicians self-selected into payment models based on existing practice characteristics. Physicians with more complex patient populations were less likely to switch into capitation-based payment models where higher levels of effort were not financially rewarded. These findings suggested that investigations aimed at assessing the impact of different primary care reimbursement models on outcomes, including costs and access, should first account for potential selection effects.

Keywords: financial incentives; physician payment; primary care; risk selection; self-selection.