Paying for primary care: a cross-sectional analysis of cost and morbidity distributions across primary care payment models in Ontario Canada

Soc Sci Med. 2015 Jan;124:18-28. doi: 10.1016/j.socscimed.2014.11.001. Epub 2014 Nov 5.


Policy-makers desire an optimal balance of financial incentives to improve productivity and encourage improved quality in primary care, while also avoiding issues of risk-selection inherent to capitation-based payment. In this paper we analyze risk-selection in capitation-based payment by using administrative data for patients (n = 11,600,911) who were rostered (i.e., signed an enrollment form, or received a majority of care) with a primary care physician (n = 8621) in Ontario, Canada in 2010/11. We analyze this data using a relative distribution approach and compare distributions of patient costs and morbidity across primary care payment models. Our results suggest a relationship between being in a capitation-based payment scheme and having low cost patients (and presumably healthy patients) compared to fee-for-service physicians. However, we do not have evidence that physicians in capitation-based models are reducing the care they provide to sick and high cost patients. These findings suggest there is a relationship between payment type and risk-selection, particularly for low-cost and healthy patients.

Keywords: Canada; Case mix; Ontario; Payment incentives; Physician behavior; Primary care; Relative distribution.

Publication types

  • Comparative Study
  • Research Support, Non-U.S. Gov't

MeSH terms

  • Cross-Sectional Studies
  • Diagnosis-Related Groups / economics*
  • Fees and Charges
  • Health Care Costs*
  • Humans
  • Insurance, Health, Reimbursement
  • Models, Economic*
  • National Health Programs / economics*
  • Ontario
  • Primary Health Care / economics*
  • Reimbursement, Incentive