Physician practice patterns in primary care: Do ownership and payment mechanism matter?

Abstract

Providing health services at affordable prices while balancing quality with cost has been a major challenge for health managers as well as policy makers particularly in the developing world in an era of major constraints on financial and human resources. This balance has been difficult to sustain especially in the public sector, often criticized for low levels of efficiency. On the other hand, the private sector has made strides in management efficiency and cost control. Research efforts have been focusing on financial incentives and its impact on the decision making process of the provider in terms of quantity and quality of services. This study assessed the impact of ownership, on the practice patterns of providers under different physician payment mechanisms in primary care centers in Lebanon. The results support the notion that not only payment mechanisms, but also type of ownership affects physicians' behavior. Government health centers exhibited a lower mean duration of visit and less referral patterns. In governmental centers, fee-for-service physicians reported the highest referral rate compared with salaried physicians. A mixed payment mechanism that would provide a prospective payment coupled with some risk adjustment, pay for performance, to reward value added services might be a viable alternative to current practices.