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KMID : 1170320060120020057
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Korean Journal of Health Economics and Policy
2006 Volume.12 No. 2 p.57 ~ p.75
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Payment systems and the performance of primary care physicians
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Lee Tae-Jin
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Abstract
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Given limited health resources, a payment system aims to achieve both appropriateness of services and cost containment. Fee-for-service payment with fee control, implemented since the inception of health insurance in Korea, has not been successful in achieving those aims The principal-agent model tells that only incentive-compatible payment can make primary care physicians provide services in the interest of patients. To satisfy incentive compatibility, it is necessary to design a payment system whereby primary care physicians bear some financial risk resulting from service provision. One option for financial risk sharing is to adjust reimbursement level for primary care physicians ex post depending the
volume or quality of services they provide under the fee-for-service system. To change FFS into a different payment like global contract or a mixed payment can be another option.
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KEYWORD
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Payment system, Incentive compatibility, Financial risk
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