Paying Physicians as Agents: Fee-For-Service, Caption, or Hybrids?
How physicians should be paid is a key question for privately managed HMOs and insurance plans, administrators of public insurances, and public policy makers. The popular concern usually is with the level of physician net income—do doctors make too much?—but the analytical problem is frequently more concerned with how a given income is earned, and what consequences it has for substitute or compliment inputs and services physicians can control. After all, physician net income is only 12% of total health spending; cutting it by 10% would do little good, but increasing it by 40% might be a bargain if the increase could be coupled with financial incentives to reduce the use of other inputs.
KeywordsMarginal Cost Health CARE Policy Diagnosis Related Group Physician Service Manage Care Plan
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