Popular in Social Sciences

Banks and Policy Organisations

Macroeconomic modelling of CBDC: a critical review

European Central Bank Ulrich Bindseil

Social Identities and Divisions

A new explanation of antisemitism: Jew hatred as a civilisational phenomenon

Boston University Liah Greenfeld

Banks and Policy Organisations

Financing Private Credit

Federal Reserve Bank of New York Nina Boyarchenko

Economics

Failing Banks

Massachusetts Institute of Technology Emil Verner

Culture and Society

The City as a Growth Machine: Toward a Political Economy of Place

New York University Harvey Moltoch

American Politics

Keeping the Republic

Boston College Marc Landy

British Politics

Entrepreneurial thinking: the politics and practice of policy impact

University of Sheffield Matthew Flinders

Payment Mechanisms and the Composition of Physician Practices

View more insights in Social Sciences - Economics - Health Economics

View more figures from University of Ottawa

View the page of Victoria Barham

Read the Study

Next in Economics

Deindustrialization and Industry Polarization

Michael Sposi | Southern Methodist University

EU non-bank finance returns to growth

Richard Portes | London Business School

Victoria Barham discusses the explicit account of the way in which the supply of physicians and patients in the economy affects the design of physician remuneration schemes.

Image courtesy of interviewee. March 21, 2024

Log-in or Sign-up to Faculti
Currently viewing this subject insight as a guest. You have insight(s) remaining for this month. Login to view 8000+ figures on the platform.

Generating Workspace...

Export as PDF

This video video discusses a theoretical paper focused on the impact of physician compensation schemes on their decisions regarding patient volume and care quality. It emphasizes the differences in physician decision-making in systems with an abundance of patients compared to those with a physician shortage, like Canada. The author critiques traditional literature that primarily views these dynamics from a scarcity perspective, arguing that it neglects contexts where physicians can accept as many patients as they wish.

The paper posits that in environments with limited physicians, like Canada, fee-for-service payment models can lead to efficient care delivery as physicians are not pressured to over-provide services. It indicates that this model minimizes financial risks for doctors compared to capitation models, which can encourage group practices to mitigate individual risk.

The author advocates for reevaluating fee-for-service systems, particularly in underserved areas, to ensure physicians are compensated fairly for their work. It concludes by stressing the importance of understanding risk-sharing in healthcare and determining the level of care that effectively meets public health needs while encouraging sustainable physician practices.

Language:

Export as PDF

X-TIMESTAMP-MAP=LOCAL:00:00:00.000,MPEGTS:90000

1
00:00:00.155 --> 00:00:04.245
That particular paper is really a theoretical paper,

2
00:00:05.025 --> 00:00:08.645
as opposed to one where we do a lot of actual auditing

3
00:00:08.665 --> 00:00:11.925
or something of the like, of, of, of physician practices.

4
00:00:12.545 --> 00:00:15.525
But it is trying to understand how the way in which

5
00:00:15.945 --> 00:00:19.725
as we design different, physician compensation schemes,

6
00:00:20.395 --> 00:00:24.685
this affects physicians' decisions about, the number

7
00:00:24.685 --> 00:00:29.205
of patients to put in their practice, in the, and,

8
00:00:29.225 --> 00:00:33.205
and sort of, and what sort of care to give to each patient.

9
00:00:33.825 --> 00:00:38.605
Um, one of the things that we believe is really important is

10
00:00:38.605 --> 00:00:41.005
that there is an enormous difference

11
00:00:41.115 --> 00:00:43.685
between the way in which physicians take those

12
00:00:43.685 --> 00:00:44.725
sorts of decisions.

13
00:00:45.425 --> 00:00:48.125
Uh, if there are lots and lots and lots

14
00:00:48.125 --> 00:00:51.085
and lots of patients available versus,

15
00:00:51.085 --> 00:00:53.005
when they are competing with other physicians,

16
00:00:53.545 --> 00:00:54.805
for patients.

17
00:00:54.985 --> 00:00:57.205
And traditionally, much

18
00:00:57.205 --> 00:01:00.805
of the literature has been framed in sort

19
00:01:00.805 --> 00:01:02.685
of essentially the American world,

20
00:01:03.385 --> 00:01:07.445
or I would argue the traditional French healthcare world

21
00:01:08.055 --> 00:01:10.605
where there were lots of physicians

22
00:01:10.825 --> 00:01:13.165
and not necessarily as many patients.

23
00:01:14.025 --> 00:01:17.365
But, you know, in Canada it's where

24
00:01:17.465 --> 00:01:20.285
for a long time there has been a shortage of physicians.

25
00:01:21.075 --> 00:01:24.165
It's clear that there is absolutely no

26
00:01:24.685 --> 00:01:27.645
pressure on physicians to over provide services.

27
00:01:28.185 --> 00:01:31.085
In fact, it is the, we actually arguably deal

28
00:01:31.085 --> 00:01:32.325
with the opposite problem.

29
00:01:33.385 --> 00:01:35.365
Um, and, and so

30
00:01:35.995 --> 00:01:40.125
when we think about payment mechanisms in a context in which

31
00:01:40.135 --> 00:01:44.005
there are, you know, physicians can have as many, they know,

32
00:01:44.005 --> 00:01:46.045
they can have as many patients as they want.

33
00:01:47.065 --> 00:01:48.805
The, the, the results of

34
00:01:48.805 --> 00:01:52.325
that analysis are really different from thinking about it

35
00:01:52.425 --> 00:01:56.605
in, in a context in which it's the patients who are scarce

36
00:01:57.285 --> 00:01:58.445
relative to the number of physicians.

37
00:01:58.965 --> 00:02:03.485
I have to admit that I am sufficiently far from

38
00:02:03.485 --> 00:02:04.565
that particular paper.

39
00:02:04.625 --> 00:02:06.005
Now that I, I'm not gonna go

40
00:02:06.005 --> 00:02:07.445
and unpack all of the literature,

41
00:02:07.445 --> 00:02:11.365
but there are fantastic, chapters in all of,

42
00:02:11.365 --> 00:02:13.045
you know, handbooks in health economics,

43
00:02:13.065 --> 00:02:16.045
on physician payment schemes, et cetera, that do, you know,

44
00:02:16.115 --> 00:02:19.045
provide excellent, excellent, excellent surveys

45
00:02:19.665 --> 00:02:24.205
of this traditional literature on, on, on physician payment

46
00:02:24.665 --> 00:02:28.725
and, and what happens in terms of, the number of,

47
00:02:28.785 --> 00:02:30.325
of patients they're gonna have.

48
00:02:30.585 --> 00:02:34.285
But all of that literature without exception

49
00:02:35.825 --> 00:02:37.205
is taking the view.

50
00:02:37.785 --> 00:02:41.565
It, it's, these are, these are based on imperfect models of,

51
00:02:41.705 --> 00:02:43.165
you know, not exactly monopoly,

52
00:02:43.165 --> 00:02:45.405
but essentially, you know, a, a situation

53
00:02:45.405 --> 00:02:47.685
where patients are scarce.

54
00:02:48.385 --> 00:02:51.845
And so you are deciding whether

55
00:02:51.865 --> 00:02:54.565
or not you're going to give, you know, what sort of level

56
00:02:54.565 --> 00:02:56.445
of service are you going to give the patients

57
00:02:56.445 --> 00:02:59.200
that you can attract and how pricing is related to that.

58
00:02:59.545 --> 00:03:02.565
So this was truly a very different approach

59
00:03:02.565 --> 00:03:05.925
because this is the only paper I am aware of,

60
00:03:06.135 --> 00:03:08.445
where you start from the notion that

61
00:03:09.205 --> 00:03:10.605
actually the physician can have

62
00:03:11.025 --> 00:03:12.725
as many patients as they want.

63
00:03:13.305 --> 00:03:14.405
Um, and, and

64
00:03:14.515 --> 00:03:17.005
therefore, doesn't have

65
00:03:17.345 --> 00:03:20.725
to think about over providing services if they,

66
00:03:20.865 --> 00:03:23.405
and, you know, they can decide to provide a higher level

67
00:03:23.505 --> 00:03:27.085
of care or to, or to, to fewer patients

68
00:03:27.105 --> 00:03:29.685
or to, to see more patients,

69
00:03:29.865 --> 00:03:32.005
and provide a different, you know, a lower level of care

70
00:03:32.705 --> 00:03:35.685
and, and they don't have to worry about any sort

71
00:03:35.685 --> 00:03:38.365
of trade off in terms of their overall income.

72
00:03:39.065 --> 00:03:42.645
Um, and, and then the issue becomes, so whether

73
00:03:42.705 --> 00:03:47.645
or not, when you think about the different schemes,

74
00:03:47.645 --> 00:03:51.525
like fee for service versus, for example, capitation,

75
00:03:51.595 --> 00:03:54.805
what are the consequences for the physician of going

76
00:03:54.835 --> 00:03:57.725
with a smaller number of patients, providing them

77
00:03:57.725 --> 00:04:02.245
with a higher level of care possibly, or just getting stuck.

78
00:04:02.325 --> 00:04:05.245
I mean, the, with the capitation model, it's the physician

79
00:04:05.245 --> 00:04:09.805
who is, who is bearing the risk, of, whereas

80
00:04:09.805 --> 00:04:12.645
with a fee for service model, there is an incentive to just

81
00:04:13.645 --> 00:04:14.895
like you're working full time,

82
00:04:15.515 --> 00:04:17.135
but with the fee for service model,

83
00:04:17.205 --> 00:04:20.495
when you have an abundance of patients, you don't have

84
00:04:20.595 --> 00:04:24.935
as a physician, any risk about not being paid for your time.

85
00:04:25.515 --> 00:04:26.935
So this leads to,

86
00:04:27.335 --> 00:04:30.615
I think I believe the right outcomes, oddly enough.

87
00:04:31.075 --> 00:04:33.295
So it is absolutely a theoretical paper.

88
00:04:33.435 --> 00:04:35.895
So we didn't use a data set in that paper.

89
00:04:36.485 --> 00:04:39.535
There's another paper I wrote with, some people,

90
00:04:39.895 --> 00:04:42.215
Roseanne, Devlin and Simon, et cetera.

91
00:04:42.215 --> 00:04:43.255
Where we were compare, we,

92
00:04:43.255 --> 00:04:46.855
where we did was an empirical paper,

93
00:04:47.225 --> 00:04:50.775
where we were looking at, the different models

94
00:04:50.915 --> 00:04:53.975
of funding primary care in Ontario.

95
00:04:54.955 --> 00:04:57.295
Um, and that paper,

96
00:04:57.635 --> 00:05:00.215
did have a dataset which was drawn from chart

97
00:05:00.435 --> 00:05:01.855
audits, et cetera, et cetera.

98
00:05:02.035 --> 00:05:05.815
And that paper showed that, so

99
00:05:05.815 --> 00:05:09.095
and so it was a DEA, but it was a DEA model.

100
00:05:09.755 --> 00:05:12.015
And that paper found that fee for service

101
00:05:12.835 --> 00:05:15.615
was providing slightly less high quality care

102
00:05:16.245 --> 00:05:20.375
than a community, healthcare center approach approach,

103
00:05:20.375 --> 00:05:21.615
sort of a team-based approach.

104
00:05:22.075 --> 00:05:26.695
But the cost of the improvement in the quality of care was

105
00:05:27.205 --> 00:05:28.335
very, very small.

106
00:05:29.275 --> 00:05:31.335
Uh, the, the, the improvement in the quality

107
00:05:31.355 --> 00:05:32.575
of care was very, very small,

108
00:05:32.595 --> 00:05:34.415
and the cost of that was very, very large.

109
00:05:35.275 --> 00:05:40.055
So again, essentially found that fee for service, you know,

110
00:05:40.115 --> 00:05:42.135
in the context in which we live in, in a,

111
00:05:42.275 --> 00:05:45.655
in a community in which patients are abundant,

112
00:05:46.015 --> 00:05:48.095
actually was a very cost efficient way

113
00:05:48.095 --> 00:05:49.455
of providing high quality care.

114
00:05:49.795 --> 00:05:51.655
The key result is that it's time

115
00:05:51.655 --> 00:05:53.295
to have another look at fee for service.

116
00:05:54.315 --> 00:05:59.005
Um, because the problems with fee, the rise with fee

117
00:05:59.005 --> 00:06:03.565
for service in a mark in, in a healthcare setting in which,

118
00:06:04.265 --> 00:06:07.365
patients are scarce

119
00:06:08.065 --> 00:06:10.925
and where doctors are, you know, trying to make, you know,

120
00:06:12.315 --> 00:06:15.475
generate income from scarce patients are very,

121
00:06:15.735 --> 00:06:18.955
are completely different from what we expect

122
00:06:19.575 --> 00:06:23.795
in a context in which, it's difficult for patients

123
00:06:23.795 --> 00:06:25.515
to find a doctor who will take them.

124
00:06:26.885 --> 00:06:28.505
And that in the context,

125
00:06:28.605 --> 00:06:32.745
so in the context in which we function in Canada, where,

126
00:06:33.415 --> 00:06:36.425
doctors are scarce, fee for service

127
00:06:37.215 --> 00:06:39.345
reduces the risk to doctors,

128
00:06:40.245 --> 00:06:42.825
the public sector is much better able

129
00:06:42.885 --> 00:06:45.345
to take on risk than an individual physician.

130
00:06:45.465 --> 00:06:49.145
I mean, we do see with, you know, what are the responses

131
00:06:49.145 --> 00:06:53.625
of physicians to the higher risk that they have to bear

132
00:06:53.625 --> 00:06:57.065
with sort of capitation pay based payment schemes is

133
00:06:57.065 --> 00:06:58.745
that they form group practices

134
00:06:58.895 --> 00:07:02.585
because that reduces the risk born

135
00:07:02.605 --> 00:07:03.905
by an individual doctor.

136
00:07:05.005 --> 00:07:07.985
Um, but if, if we are wanting

137
00:07:08.045 --> 00:07:11.705
to get the best return on the public health care dollar

138
00:07:12.955 --> 00:07:16.615
in an environment in which we don't have enough doctors

139
00:07:16.795 --> 00:07:21.575
to go around, we should probably reexamine fee for service

140
00:07:22.125 --> 00:07:26.255
because then doctors know that they will be paid

141
00:07:26.475 --> 00:07:27.575
for the work they are doing.

142
00:07:28.035 --> 00:07:30.935
You can you, you already see where this heading is heading.

143
00:07:31.095 --> 00:07:34.135
I mean, I, I think we absolutely need to

144
00:07:35.065 --> 00:07:40.055
think about the risk, the how we share risk efficiently,

145
00:07:40.195 --> 00:07:42.895
as well as at the quality of care that we want

146
00:07:42.895 --> 00:07:45.415
to incentivize doctors to provide,

147
00:07:45.835 --> 00:07:48.545
in care.

148
00:07:48.615 --> 00:07:53.585
Like we, we need to be very careful about,

149
00:07:53.725 --> 00:07:57.585
making sure that doctors are getting paid

150
00:07:57.645 --> 00:07:58.785
for the work that they do.

151
00:07:58.985 --> 00:08:01.665
I mean, very much we need to reexamine fee for service,

152
00:08:01.805 --> 00:08:04.425
but more fundamentally what we need to think about is how

153
00:08:04.445 --> 00:08:09.345
to share risk efficiently in the sector, making sure,

154
00:08:09.525 --> 00:08:12.065
and then think carefully about what is the level of care

155
00:08:12.135 --> 00:08:16.145
that we want to encourage to be provided,

156
00:08:16.415 --> 00:08:20.585
because better care is always available.

157
00:08:21.325 --> 00:08:25.665
Um, the question is making sure that we're providing

158
00:08:26.425 --> 00:08:28.985
encouraging physicians to provide the, the level

159
00:08:28.985 --> 00:08:33.145
of care we believe is socially optimal,

160
00:08:33.525 --> 00:08:36.505
rather than necessarily the very best possible level

161
00:08:36.525 --> 00:08:39.665
of care which is ave which could be imagined.

162
00:08:40.405 --> 00:08:44.705
Um, so, so thinking about risk, making sure that

163
00:08:45.285 --> 00:08:47.185
you know, the, since, since the,

164
00:08:47.765 --> 00:08:49.985
the public sector is better able

165
00:08:49.985 --> 00:08:52.505
to bear risk than an individual physician, trying

166
00:08:52.505 --> 00:08:54.785
to make sure that we think about that. I think this

167
00:08:54.785 --> 00:08:57.725
Is particularly important in the context of wanting

168
00:08:57.745 --> 00:08:59.965
to make sure that physicians locate

169
00:09:00.705 --> 00:09:02.965
in more remote communities,

170
00:09:02.995 --> 00:09:06.005
because those are in those sorts of communities.

171
00:09:06.515 --> 00:09:10.045
This issue of am I actually gonna be paid for the work

172
00:09:10.045 --> 00:09:12.365
that I'm doing is particularly acute

173
00:09:12.365 --> 00:09:14.125
because there are fewer people with whom

174
00:09:14.385 --> 00:09:15.525
to share a practice.

175
00:09:16.025 --> 00:09:19.085
So your opportunities for, for risk pooling are reduced.

176
00:09:19.785 --> 00:09:21.005
Um, and so

177
00:09:21.005 --> 00:09:23.725
therefore the importance of making sure

178
00:09:23.835 --> 00:09:28.445
that in those communities, doctors will, will,

179
00:09:28.515 --> 00:09:30.885
will not be asked to bear risk is, is important and

180
00:09:30.885 --> 00:09:34.965
therefore fee for service is actually bizarrely,

181
00:09:35.245 --> 00:09:37.205
a really good way of, of making that happen.

Physician Compensation and Patient Care Dynamics

00:00:00 - That particular paper is really a theoretical paper, as opposed to one where we do a lot of actual auditing or something of the like, of, of, of physician practices. But it is trying to understand how the way in which as we design different, physician compensation schemes, this affects physicians' decisions about, the number of patients to put in their practice, in the, and, and sort of, and what sort of care to give to each patient.
00:00:38 - that there is an enormous difference between the way in which physicians take those sorts of decisions. if there are lots and lots and lots and lots of patients available versus, when they are competing with other physicians, for patients. And traditionally, much of the literature has been framed in sort of essentially the American world, or I would argue the traditional French healthcare world
00:01:10 - and not necessarily as many patients. But, you know, in Canada it's where for a long time there has been a shortage of physicians. It's clear that there is absolutely no pressure on physicians to over provide services. In fact, it is the, we actually arguably deal with the opposite problem. and, and so when we think about payment mechanisms in a context in which
00:01:44 - they can have as many patients as they want. The, the, the results of that analysis are really different from thinking about it in, in a context in which it's the patients who are scarce relative to the number of physicians. I have to admit that I am sufficiently far from that particular paper. Now that I, I'm not gonna go and unpack all of the literature, but there are fantastic, chapters in all of,
00:02:13 - on physician payment schemes, et cetera, that do, you know, provide excellent, excellent, excellent surveys of this traditional literature on, on, on physician payment and, and what happens in terms of, the number of, of patients they're gonna have. But all of that literature without exception is taking the view. It, it's, these are, these are based on imperfect models of,
00:02:43 - but essentially, you know, a, a situation where patients are scarce. And so you are deciding whether or not you're going to give, you know, what sort of level of service are you going to give the patients that you can attract and how pricing is related to that. So this was truly a very different approach because this is the only paper I am aware of, where you start from the notion that actually the physician can have as many patients as they want.

Understanding Physician Care Levels and Payment Models

00:03:14 - therefore, doesn't have to think about over providing services if they, and, you know, they can decide to provide a higher level of care or to, or to, to fewer patients or to, to see more patients, and provide a different, you know, a lower level of care and, and they don't have to worry about any sort of trade off in terms of their overall income. and, and then the issue becomes, so whether or not, when you think about the different schemes,
00:03:51 - what are the consequences for the physician of going with a smaller number of patients, providing them with a higher level of care possibly, or just getting stuck. I mean, the, with the capitation model, it's the physician who is, who is bearing the risk, of, whereas with a fee for service model, there is an incentive to just like you're working full time, but with the fee for service model, when you have an abundance of patients, you don't have
00:04:25 - So this leads to, I think I believe the right outcomes, oddly enough. So it is absolutely a theoretical paper. So we didn't use a data set in that paper. There's another paper I wrote with, some people, Roseanne, Devlin and Simon, et cetera. Where we were compare, we, where we did was an empirical paper, where we were looking at, the different models
00:04:54 - and that paper, did have a dataset which was drawn from chart audits, et cetera, et cetera. And that paper showed that, so and so it was a DEA, but it was a DEA model. And that paper found that fee for service was providing slightly less high quality care than a community, healthcare center approach approach, sort of a team-based approach.
00:05:27 - very, very small. the, the, the improvement in the quality of care was very, very small, and the cost of that was very, very large. So again, essentially found that fee for service, you know, in the context in which we live in, in a, in a community in which patients are abundant, actually was a very cost efficient way of providing high quality care. The key result is that it's time to have another look at fee for service.
00:05:59 - for service in a mark in, in a healthcare setting in which, patients are scarce and where doctors are, you know, trying to make, you know, generate income from scarce patients are very, are completely different from what we expect in a context in which, it's difficult for patients to find a doctor who will take them.

Reevaluating Physician Payment Models in Canada

00:06:28 - so in the context in which we function in Canada, where, doctors are scarce, fee for service reduces the risk to doctors, the public sector is much better able to take on risk than an individual physician. I mean, we do see with, you know, what are the responses of physicians to the higher risk that they have to bear with sort of capitation pay based payment schemes is
00:06:58 - because that reduces the risk born by an individual doctor. but if, if we are wanting to get the best return on the public health care dollar in an environment in which we don't have enough doctors to go around, we should probably reexamine fee for service because then doctors know that they will be paid for the work they are doing.
00:07:31 - I mean, I, I think we absolutely need to think about the risk, the how we share risk efficiently, as well as at the quality of care that we want to incentivize doctors to provide, in care. Like we, we need to be very careful about, making sure that doctors are getting paid for the work that they do.
00:08:01 - but more fundamentally what we need to think about is how to share risk efficiently in the sector, making sure, and then think carefully about what is the level of care that we want to encourage to be provided, because better care is always available. the question is making sure that we're providing encouraging physicians to provide the, the level
00:08:33 - rather than necessarily the very best possible level of care which is ave which could be imagined. so, so thinking about risk, making sure that you know, the, since, since the, the public sector is better able to bear risk than an individual physician, trying to make sure that we think about that. I think this Is particularly important in the context of wanting to make sure that physicians locate
00:09:02 - because those are in those sorts of communities. This issue of am I actually gonna be paid for the work that I'm doing is particularly acute because there are fewer people with whom to share a practice. So your opportunities for, for risk pooling are reduced. and so therefore the importance of making sure that in those communities, doctors will, will, will not be asked to bear risk is, is important and

Strategies for Effective Implementation

00:09:35 - a really good way of, of making that happen.

Faculti AI can make mistakes

Faculti

Popular in Social Sciences

Macroeconomic modelling of CBDC: a critical review

Financing Private Credit

Failing Banks

The City as a Growth Machine: Toward a Political Economy of Place

Keeping the Republic

Entrepreneurial thinking: the politics and practice of policy impact

Payment Mechanisms and the Composition of Physician Practices

Next in Economics

Guide

Platform and Category Pages

Contact Us

FAQs

What is Faculti?

How do you select interviews?

Interview Process

Page Structure

Popular in Social Sciences

Guide

Platform and Category Pages

Contact Us

FAQs

What is Faculti?

How do you select interviews?

Interview Process

Accessibility Options

Contrast Adjustment

Text Size Adjustment

Text Spacing Adjustment

Line Height Adjustment

Cursor Size Adjustment

Page Structure Options

Page Structure