Volume 196 - Issue 2
Should more Australian doctors be salaried than paid by fee-for-service?
Authors: Matthew H R Anstey and Stephen P Gildfind
Med J Aust 2012; 196 (2): 109-110. || doi: 10.5694/mja11.11446
Published online: 6 February 2012
Published online: 6 February 2012
To the Editor: In his Opposing Views article, Travis claims that fee- for-service (FFS) “provides the best transparency, accountability and incentive for everyone”.1 However, FFS models reward volume and intensity, rather than quality of outcomes. Evidence suggests that FFS results in increased numbers of patient visits, investigations and procedures,2 which contribute to inflation in the cost of health care.3
Further, an FFS model is “transparent” only on a most superficial level, because doctors are paid for the number of items they deliver. What matters most is transparency about whether the care being delivered to patients is in those patients’ best interests. Patients do not have the same grasp of technical information as their doctors. They assume, with justification, that most doctors perform their clinical practice not primarily to serve their own incomes, but patients’ best interests. Regardless, it is undeniable that the reward structure associated with an FFS system provides powerful incentives for delivering more services, with clinicians subsequently inducing increased demand for medical services.4
On the other hand, the problem with purely salaried providers is that they are more likely to underservice their patients, with an increase in the length and a decrease in the number of consultations.2
Clearly, neither of these payment systems is optimal for driving quality or efficiency in resource use. The ideal outcome from health care reform would be one in which the focus is on delivering high-quality, efficient care to patients, rather than high-quantity care. In designing the optimal payment structure, the aim should be to align the incentive with the quality and appropriateness of the care that is delivered — to reward doctors for their efforts to provide good health outcomes for patients.3
Our current health system provides much lower rewards for the doctors who practise much of our preventive care (general practitioners and physicians) than it does for procedural specialists. This may not be the most cost-effective strategy, and part of the debate about how doctors are paid should be directed at this imbalance. There has been experimentation with “capitation combined with pay-for-performance” or “shared savings” models, which are promising attempts to find the best balance of incentives for cost control and quality improvement.5
Competing interests
No relevant disclosures.
References
- Travis DG. Should more Australian doctors be salaried than paid by fee-for-service? Med J Aust 2011; 195: 257. 0_i1142877
- Gosden T, Forland F, Kristiansen IS, et al. Capitation, salary, fee-for-service and mixed systems of payment: effects on the behaviour of primary care physicians. Cochrane Database Syst Rev 2000; (3): CD002215. 0_i1142879
- Roberts MJ. Getting health reform right: a guide to improving performance and equity. New York: Oxford University Press, 2004. 0_i1142881
- Hennig-Schmidt H, Selten R, Wiesen D. How payment systems affect physicians’ provision behaviour — an experimental investigation. J Health Econ 2011; 30: 637-646. 0_i1142883
- Rosenthal MB. Beyond pay for performance — emerging models of provider-payment reform. N Engl J Med 2008; 359: 1197-1200. 0_i1142886