Physicians self selection of a payment mechanism: Capitation versus fee-for-service

Marie Allard (1) , Izabela Jelovac (2) , Pierre-Thomas Léger (1, 3, 4)

1 HEC Montréal - HEC Montréal
2 GATE Lyon Saint-Étienne - Groupe d'Analyse et de Théorie Economique Lyon - Saint-Etienne
3 CIRANO - Centre interuniversitaire de recherche en analyse des organisations
4 CIRPEE - Centre interuniversitaire sur le risque, les politiques économiques et l'emploi

The main question raised in this paper is whether GPs should self select their paymentmechanism or not. To answer it, we model GPs' behavior under the most commonpayment schemes (capitation and fee-for-service) and when GPs can select one amongthose. Our analysis considers GPs heterogeneity in terms of both ability and sense ofprofessional duty. We conclude that when savings on specialists costs are the mainconcern of a regulator, GPs should be paid on a fee-for-service basis. Instead, whenfailures to identify severe conditions are the main concern, then payment self selection byGPs can be optimal.

Mots clés: GPs; gatekeeping; payment scheme; self selection; ability; professional duty

Domaines: Economies et finances

Marie Allard, Izabela Jelovac, Pierre-Thomas Léger. Physicians self selection of a payment mechanism: Capitation versus fee-for-service. 2010. ⟨halshs-00523370⟩