A variety of studies have evaluated the influence of physician incentive and reimbursement systems on the provision of services. Many of those studies have evaluated practice patterns in the primary care setting, and the majority of them confirmed expectations that financial incentives to provide less care result in decreased hospitalization, resource use, and costs, although not universally, according to background information in the article. Under the fee-for-service (FFS) system, physicians are reimbursed for each procedure, and under the contact capitation (CC) system, physicians are provided a lump sum for each patient they manage.
William Shrank, M.D., MSHS, who was with the Veterans Affairs Greater Los Angeles Health Care System at the time of the research, and colleagues compared the effects of FFS and CC on cataract extraction rates and costs. (Dr. Shrank is now with Brigham and Women's Hospital, Harvard Medical School, Boston.) The researchers analyzed claims and other data for an average of 91,473 commercial beneficiaries and 14,084 Medicare beneficiaries receiving eye care from a network of ophthalmologists and optometrists in St. Louis, Mo., between 1997 and 1998. The rate of cataract extractions per 1,000 beneficiaries, the costs of cataract procedures, the rates of non-cataract procedures, and the level of professional reimbursement for providers were compared during the final six months of FFS physician reimbursement and the first six months of CC.
"Compared with fee-for-service, contact capitation reimbursement
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