Fee-for-service funding of primary care: Adverse side effects for patients and society?

About 90% of Norwegian general practitioners (GPs) are paid by a fee-for-service model, whereas the remaining 10% mainly work for a fixed salary. Outside primary health care, fee-for-service is an uncommon financing model in public sector. Fee-for-service models are commonly expected to promote GPs' productivity. There is some evidence however that the fee-for-service model increases the number of performed procedures without improving public health, and it may even cause overutilization of health care and certain bad practices. Evidence is however mixed and limited. The current fee-for-service model incentivizes short consultations with each patient and the conducting of many procedures. It also incentivizes avoiding confrontations with the patient as this increase the duration of consultations and possibly the risk of the patient switching to another GP. Dissatisfied patients may also share their experience with others. GPs have a role as gatekeepers on behalf of society. For example, GPs are expected to restrict access to antibiotics and medication that may cause dependency. They are also expected to reduce welfare dependency by restricting access to long-term sickness absence. Some GPs may be more sensitive to financial incentives than others. It is an empirical question to what extent some GPs aim to maximize profit by adapting their practice to the incentives, and whether this is harmful for patients. It is also an empirical question if GPs on fixed-salaries differ from GPs on a fee-for-service model in the above. We aim to improve our understanding of how GPs respond to the incentives in the fee-for service system, and what consequences this has for their patients. This knowledge will inform future reforms and evaluations of the welfare system, and may be key in reducing the unnecessary prescription of antibiotics, sedatives and tranquilizers, and it may be key for health authorities in reducing welfare dependency. Update on 01.12.23: We have carried out the qualitative part of the project and we have found that the physician is familiar with the incentives in the tax system. They report that port surveillance to limit patient requests (or demands) for illness reporting, addictive medications, referrals or antibiotics takes time, and that this does not pay under the current tariff system because it takes longer to say no than yes. Port surveillance takes time, and it does not pay under the tax system. Furthermore, challenging patients’ requests or demands can challenge the relationship with the patient and negatively affect the doctor’s reputation. These conditions weaken the port guardian role. Two articles on this topic will be submitted by the end of 2024. Ad registry data has been significantly delayed for reasons beyond our control. We now have most of the registry data in the project and have started to analyze them. We have analyzed data for the first issue and presented the results at the Trygdeforskning Conference in Bergen in November 2023. Preliminary results suggest that physicians who earn well per hour have shorter consultations on average. Further analyses will explore this in view of the port weighting of the aforementioned endpoints.

About 90% of Norwegian general practitioners (GPs) are paid by a fee-for-service model, whereas the remaining 10% mainly work for a fixed salary. Outside primary health care, fee-for-service is an uncommon financing model in public sector. Fee-for-service models are commonly expected to promote GPs' productivity. There is some evidence however that the fee-for-service model increases the number of performed procedures without improving public health, and it may even cause overutilization of health care and certain bad practices. Evidence is however mixed and limited. The current fee-for-service model incentivizes short consultations with each patient and the conducting of many procedures. It also incentivizes avoiding confrontations with the patient as this increase the duration of consultations and possibly the risk of the patient switching to another GP. Dissatisfied patients may also share their experience with others. GPs have a role as gatekeepers on behalf of society. For example, GPs are expected to restrict access to antibiotics and medication that may cause dependency. They are also expected to reduce welfare dependency by restricting access to long-term sickness absence. Some GPs may be more sensitive to financial incentives than others. It is an empirical question to what extent some GPs aim to maximize profit by adapting their practice to the incentives, and whether this is harmful for patients. It is also an empirical question if GPs on fixed-salaries differ from GPs on a fee-for-service model in the above. We aim to improve our understanding of how GPs respond to the incentives in the fee-for service system, and what consequences this has for their patients. This knowledge will inform future reforms and evaluations of the welfare system, and may be key in reducing the unnecessary prescription of antibiotics, sedatives and tranquilizers, and it may be key for health authorities in reducing welfare dependency.