Effects of Physician Payment Methods : A Descriptive Study of the Situation in Norway, UK. Ghana.

Abstract

BACKGROUND: In view of the fact that payment systems for physicians may affect the efficiency and effectiveness of health care service provision, the design of compensation schemes is a major policy concern. According to standard labour economics and agency theory, fee-for-service and debatably pay for performance contracts are likely to provoke higher service production than salary contracts and capitation contracts. Compensation systems may also power service quality and the overall cost control. Regardless of the obvious policy significance of these issues, the accessible empirical research is very limited. This paper is a challenge to remedy this situation by addressing the impact of different contracts and payment systems on primary care physicians’ service supply in Norway, UK and investigate if there are lessons Ghana can learn from these two countries. METHOD: a search strategy was tailored to systematically identify relevant studies from Norway and UK. The following databases were searched: Econlit, Medline, and Google Scholar. Free text searches were carried out on the databases listed above with terms such as; salary or fee-for-service or capitation or reimbursement or payment for performance or quality and outcomes framework or incentive in juxtaposition with the following: general practitioner or family physician or general practice or primary health care or primary physician in either Norway or United Kingdom. Out of the results, ten studies with different methods were selected for the review. RESULTS: The outcomes of the literature review give mixed effects of the different methods of physician compensation in Norway and UK. P4P or QOF were known to give strong incentives for improvement of quality of care after its introduction in 2004. Capitation was found to motivate GPs to increase their referral rates which would eventually increase cost of specialists’ treatment and hence higher health care expenditure. However, the predictions from theory were not fully supported by the literature review on the effects of fee-for-service or salary. CONCLUSION: The findings of this study show that the selection of payment methods for GPs is not a nonaligned verdict and has considerable practice and policy connotations. Therefore, any attempt to implement any of the methods of paying GPs must be based on the outcome of a sound and robust research.