Patient complexity and GPs' income under mixed remuneration

K R Olsen
Health Economics 2012, 21 (6): 619-32
Because of problems with recruiting GPs to deprived areas in Denmark, it has been discussed whether the mixed remuneration scheme is flexible enough to compensate GPs serving patients with high need for services. The objective is to assess how patient heterogeneity affects list size, income and total utility of GPs operating under a mixed remuneration scheme. We adapt the model by Iversen (2004) as a theoretical framework for analysing the consequences of patient heterogeneity in a mixed remuneration system. We use a data set of Danish solo practitioners to analyse the effect of patient complexity on list size and income. From the theoretical model we find that higher levels of patient complexity lead GPs to choose a lower list size, whereas the effect on income is ambiguous. The effect on total utility (income and leisure) is, however, shown to be negative. Using empirical data from 1039 solo practices we find that patient complexity reduces both list size and income and conclude that a mixed per capita and fee for service remuneration system does not fully compensate practices with more complex patients. Differentiated per capita payment may represent a means of ensuring fair and equal income of GPs.

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