Payment methods for healthcare providers in outpatient healthcare settings

What is the aim of this review?

The aim of this Cochrane Review was to assess the effect of different payment methods for healthcare providers working in outpatient healthcare settings. The review authors collected and analysed all relevant studies to answer this question and found 27 studies.

Key messages

This review suggests that different payment methods can affect healthcare provider behaviour in both positive and negative ways. For instance, whilst healthcare providers may be encouraged to provide more of specific services, they may also be encouraged to provide unnecessary services. Considerable gaps remain in the understanding of how payment of healthcare providers affects healthcare services, healthcare providers’ work morale and workload, and patient health.

What was studied in the review?

Healthcare providers may be paid in different ways. Different payment methods can encourage healthcare providers to give patients the treatment they need in the best and most cost-efficient way, but they can also encourage healthcare providers to offer poor‐quality, expensive, and unnecessary care, and to avoid certain treatments or certain types of patients. Different payment methods can also influence healthcare providers’ work morale and workload. And they can cost more or less for the healthcare system.

The review authors searched for studies on the effects of different payment methods for healthcare providers working in outpatient care. Outpatient care is where patients get health care from healthcare providers outside of hospitals and where there is no need for a bed. Healthcare centres, family planning centres, and dental clinics are all examples of outpatient facilities.

The payment methods the review authors were interested in were as follows.

- Pay-for-performance: healthcare providers are paid for carrying out certain tasks or reaching certain targets.

- Fee-for-service: healthcare providers are paid for each service they provide to the patient.

- Salary: healthcare providers are paid based on the time they spend at work.

- Capitation: healthcare providers are paid according to how many patients they have.

- A mix of these different approaches.

What are the main results of the review?

The review authors found 27 relevant studies. Most of the studies looked at primary healthcare doctors in high-income countries.

When pay-for-performance plus other payment methods (including capitation, salary, and fee-for-service) is compared to other payment methods: healthcare providers probably provide more of certain services, including immunisations. They may also provide better-quality care, including how some medicines are used, but these improvements may be reduced when the pay-for-performance payments end. Effects on patient health may be mixed. We are uncertain about the effect on healthcare providers’ work morale or workload, or on cost, because the evidence is missing or of very low certainty.

When fee-for-service methods are compared to other payment methods (such as capitation or salary): healthcare providers paid by fee-for-service may provide more unnecessary services than those paid by salary. We are uncertain about the effect on the quality or quantity of care, patient health, healthcare providers’ work morale or workload, or cost because the evidence is missing or of very low certainty.

When fee-for-service mixed with other payment methods (including fee-for-service plus capitation and fee-for-service plus salary) are compared to other payment methods: healthcare providers may provide more of specific services. We are uncertain about the effect on the quality of care, patient health, healthcare providers’ work morale or workload, cost, or unintended effects because the evidence is missing or of very low certainty.

When fee-for-service methods using a higher fee are compared to fee-for-service methods using a lower fee: healthcare providers probably provide more of certain services, including immunisations. We are uncertain if the higher fee has an impact on cost because the evidence is of very low certainty. We are uncertain about the effect on the quality of care, patient health, healthcare providers’ work morale or workload, or unintended effects because the evidence is missing.

How up-to-date is this review?

The review authors searched for studies that had been published up to 5 March 2019.

Authors' conclusions: 

For healthcare providers working in outpatient healthcare settings, P4P or an increase in FFS payment level probably increases the quantity of health service provision (moderate-certainty evidence), and P4P may slightly improve the quality of service provision for targeted conditions (low-certainty evidence). The effects of changes in payment methods on health outcomes is uncertain due to very low-certainty evidence. Information to explore the influence of specific payment method design features, such as the size of incentives and type of performance measures, was insufficient. Furthermore, due to limited and very low-certainty evidence, it is uncertain if changing payment models without including additional funding for professionals would have similar effects.

There is a need for further well-conducted research on payment methods for healthcare providers working in outpatient healthcare settings in low- and middle-income countries; more studies comparing the impacts of different designs of the same payment method; and studies that consider the unintended consequences of payment interventions.

Read the full abstract...
Background: 

Changes to the method of payment for healthcare providers, including pay-for-performance schemes, are increasingly being used by governments, health insurers, and employers to help align financial incentives with health system goals. In this review we focused on changes to the method and level of payment for all types of healthcare providers in outpatient healthcare settings. Outpatient healthcare settings, broadly defined as 'out of hospital' care including primary care, are important for health systems in reducing the use of more expensive hospital services.

Objectives: 

To assess the impact of different payment methods for healthcare providers working in outpatient healthcare settings on the quantity and quality of health service provision, patient outcomes, healthcare provider outcomes, cost of service provision, and adverse effects.

Search strategy: 

We searched CENTRAL, MEDLINE, Embase (searched 5 March 2019), and several other databases. In addition, we searched clinical trials platforms, grey literature, screened reference lists of included studies, did a cited reference search for included studies, and contacted study authors to identify additional studies. We screened records from an updated search in August 2020, with any potentially relevant studies categorised as awaiting classification.

Selection criteria: 

Randomised trials, non-randomised trials, controlled before-after studies, interrupted time series, and repeated measures studies that compared different payment methods for healthcare providers working in outpatient care settings.

Data collection and analysis: 

We used standard methodological procedures expected by Cochrane. We conducted a structured synthesis. We first categorised the payment methods comparisons and outcomes, and then described the effects of different types of payment methods on different outcome categories. Where feasible, we used meta-analysis to synthesise the effects of payment interventions under the same category. Where it was not possible to perform meta-analysis, we have reported means/medians and full ranges of the available point estimates. We have reported the risk ratio (RR) for dichotomous outcomes and the relative difference (as per cent change or mean difference (MD)) for continuous outcomes.

Main results: 

We included 27 studies in the review: 12 randomised trials, 13 controlled before-and-after studies, one interrupted time series, and one repeated measure study. Most healthcare providers were primary care physicians. Most of the payment methods were implemented by health insurance schemes in high-income countries, with only one study from a low- or middle-income country. The included studies were categorised into four groups based on comparisons of different payment methods.

(1) Pay for performance (P4P) plus existing payment methods compared with existing payment methods for healthcare providers working in outpatient healthcare settings

P4P incentives probably improve child immunisation status (RR 1.27, 95% confidence interval (CI) 1.19 to 1.36; 3760 patients; moderate-certainty evidence) and may slightly increase the number of patients who are asked more detailed questions on their disease by their pharmacist (MD 1.24, 95% CI 0.93 to 1.54; 454 patients; low-certainty evidence). P4P may slightly improve primary care physicians' prescribing of guideline-recommended antihypertensive medicines compared with an existing payment method (RR 1.07, 95% CI 1.02 to 1.12; 362 patients; low-certainty evidence). We are uncertain about the effects of extra P4P incentives on mean blood pressure reduction for patients and costs for providing services compared with an existing payment method (very low-certainty evidence). Outcomes related to workload or other health professional outcomes were not reported in the included studies. One randomised trial found that compared to the control group, the performance of incentivised professionals was not sustained after the P4P intervention had ended.

(2) Fee for service (FFS) compared with existing payment methods for healthcare providers working in outpatient healthcare settings

We are uncertain about the effect of FFS on the quantity of health services delivered (outpatient visits and hospitalisations), patient health outcomes, and total drugs cost compared to an existing payment method due to very low-certainty evidence. The quality of service provision and health professional outcomes were not reported in the included studies. One randomised trial reported that physicians paid via FFS may see more well patients than salaried physicians (low-certainty evidence), possibly implying that more unnecessary services were delivered through FFS.

(3) FFS mixed with existing payment methods compared with existing payment methods for healthcare providers working in outpatient healthcare settings

FFS mixed payment method may increase the quantity of health services provided compared with an existing payment method (RR 1.37, 95% CI 1.07 to 1.76; low-certainty evidence). We are uncertain about the effect of FFS mixed payment on quality of services provided, patient health outcomes, and health professional outcomes compared with an existing payment method due to very low-certainty evidence. Cost outcomes and adverse effects were not reported in the included studies.

(4) Enhanced FFS compared with FFS for healthcare providers working in outpatient healthcare settings

Enhanced FFS (higher FFS payment) probably increases child immunisation rates (RR 1.25, 95% CI 1.06 to 1.48; moderate-certainty evidence). We are uncertain whether higher FFS payment results in more primary care visits and about the effect of enhanced FFS on the net expenditure per year on covered children with regular FFS (very low-certainty evidence). Quality of service provision, patient outcomes, health professional outcomes, and adverse effects were not reported in the included studies.

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