Insurance Impact on Health Care

Introduction

General practitioners are the gateway to the healthcare sector. They provide first level health care treatments to the population. During the period of illness, the role of general practitioner is to give advice related to a particular person's health and disease, arrange follow-ups, order tests, prescribe medication, write medical certificates and refer patients to medical specialists. A great amount of patients receive all of the treatments in primary care but also general practitioners use their wide and medical knowledge to handle cases that are expected to give the benefit from curing by a medical specialist. The type of payment system such as fee for service or capitation has an impact on the general practitioners role and behavior.

Capitation is a health care payment system in which the doctors are given a fixed amount of remuneration for every person enrolled to that particular doctor or group of doctors. The remuneration is paid to the doctor at a particular period of time regardless of the fact that a particular person needs healthcare or not. The amount of money that the doctor received is linked with the expected utilization of the health care services by a person and factors such as age, sex, employment, location etc are also considered. This system provides certainty to both doctors and the insurance companies. Fee for services or FFS are based on charges of every service delivered by the physician. This system does not have any certainty for doctors or the insurance providers

Comparison between Capitation and Fee for Service

Several authors have reviewed the literature on whether the physician's treatment of patients is influenced by the organization of general practice and by the way physicians are paid (Scott, 2000). Rosenthal and colleagues (2004) summarize over 30 payment schemes that are currently in place in the US that cover more than 20 million insurance enrollers. Traditionally, contracts with physicians have been specified in one of three ways or some combination: fee for service (FFS), salary and capitation. Under free for service, doctors are rewarded with extra funds for each of the service; they give to their patient. Though, it might appear that as a result, it provides inspiration to enlarge the amount of the services given, the inducement is in fact somewhat more complex. There is an encouragement to boost volume only if the compensation for giving the service go beyond the doctor's cost as well as his/her time.

Even if, payments go beyond costs, the doctor will not essentially have a monetary encouragement to take care of the patients of a particular insurer; if there are numerous insurers that pay varying amount. The reason behind this is because of the patients roofed by one insurer are efficiently challenging against the patient of other insurers for the consideration of the doctor. With this caution in mind, it is safe to state that generally, fee-for-service gives an incentive to doctors to provide more services. This means that as a result of this, higher health care expenditure for insurers and ...