Grant: Travel Awards - Institute Community Support

Ontario has supplemented fee-for-service with several payment schemes for primary care physicians (PCPs), many based on age-sex adjusted capitation payments. Recent studies have demonstrated that changes in payment have coincided with increasing provincial expenditures. One possible explanation for increases in primary care costs is that the new payment schemes are overpaying for the majority of patients that use a small quantity of services. The objective of this paper is to compare cost distributions for different payment schemes in Ontario to determine how patient costs differ; and to determine whether these differences are due to increases in costs across all patients, or differences in make-up of patient populations enrolled to different payment schemes. Data was obtained from the Institute for Clinical Evaluation Sciences (ICES) in Ontario, which stores all administrative health data for the province. The time frame for this study covered a cross-section of two fiscal years (2010/11 to 2011/12). We analyzed relative distributions of patient costs across primary care practice types (i.e., different payment schemes) controlling for patient case-mix, location and practice characteristics. We also computed statistical tests to test whether there are significant differences in the distributions. Analysis is underway, but preliminary results suggest that there are uniform increases in primary care costs for patients assigned to capitation-remunerated PCPs, and that capitation-remunerated PCPs also have fewer high-cost patients on their rosters than FFS-remunerated PCPs. It is possible that age and sex adjusted capitation payments do not adequately predict patient complexity and cost, incentivizing PCPs with healthier (and less costly) patient rosters to self-select into the capitation-based payment schemes. Further studies are underway using panel methods to determine the causal relationship between payment change and the characteristics of physician rosters.