DaCHE discussion papers,
University of Southern Denmark, Dache - Danish Centre for Health Economics

Abstract: Background: Based upon the assumption that GPs utility as a function of income and leisure it has been suggested that GPs serving complex patients will face lower utility in mixed remuneration systems. The income effect in this model is ambiguous but is has been shown, with Danish data, that solo practices have lower income the higher the complexity of their patients. No analysis of partnership practices has been undertaken. Aim: To assess the income effect of patient complexity for partnership practices and discuss potential differences between solo – and partnership practices. Methods: A reduced form income equation based on the incomeleisure utility function is applied using OLS regressions on a dataset of partnership practices. Bootstrapping technics is used to estimate confidence intervals around the income effect of patient complexity and subgroup analysis is undertaken to assess differences between small and large partnerships. Results: As solopractices, partnerships have negative income effect of patient complexity meaning that the remuneration system is fully rewarding the resource use connected to serving complex patients. However the confidence interval on partnerships is ambiguous ( 4,614;2,559) and analysis of subsamples show that the income effect is negative for small partnerships (less than 4 GPs) and positive for larger partnerships (4 or more GPs). Analysis of list size and visits per patient indicates that larger partnerships are able to supply more fee for services to complex patients indicating either supply inducement from large partnerships or time rationing on small partnerships (and solo practices). Conclusion: The behavioural pattern in partnerships differs from that in solo practices and it cannot be assumed that their behaviour can be derived from the same utility function. It seems that we do not yet have a full understanding of the theoretical foundation of partnership behaviour under mixed remuneration.

Keywords: General practice; remuneration systems; partnerships

JEL-codes: I10; I18

14 pages, June 15, 2013

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