Determinants of general dentists' decisions to accept capitation payment: a conceptual model and empirical estimates

Douglas Conrad, Rosanna Lee, Peter Milgrom, Colleen Huebner
Community Dentistry and Oral Epidemiology 2009, 37 (3): 189-98

BACKGROUND: Shifts in payment options for dental care over several decades have resulted in more dental expenditures being paid through health maintenance organizations (HMOs), preferred provider organizations (PPOs), and capitation arrangements. Patients' and employers' choices to participate in these arrangements is determined in part by dentists' willingness to participate in plans, and plan choices may be influenced by patient satisfaction, self-reported oral health, and/or quality or cost of care.

OBJECTIVES: This study examined determinants of dentists' decisions to accept capitation payment for services.

RESEARCH DESIGN: Cross-sectional mail survey in December 2006.

SUBJECTS: 1605 general dentists in Oregon.

MEASURES: Questions addressed dentists' perceptions of the importance of control over various practice parameters, willingness to accept capitation payment, employment or ownership status within the practice, and practice characteristics.

RESULTS: Capitation was accepted by 22.6% of the respondent dentists (n = 729). Reported average fees (2007 dollars) ranged from $60 (initial oral examination) to approximately $800 (porcelain crowns). The likelihood of accepting capitation payment was related to the number of dentists in the practice, but surprisingly owner-dentists were no less likely than employee-dentists (associates) to accept capitation. As expected, dentists' usual and customary fees were negatively associated with accepting capitation. In contrast, measures of dentists' importance of control were not related to decisions about capitation. Longer average appointment delays were related to acceptance of capitation, but the effects were small.

CONCLUSIONS: Dentists' behavior regarding payment acceptance is generally consistent with microeconomic theory of provider behavior. Study findings should inform practitioners, plan managers, and researchers in examining dentist payment decisions.

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