Capitation and enhanced fee-for-service models for primary care reform: a population-based evaluation

Background

Primary care reform in Ontario, Canada, included the initiation of a blended capitation model in 2001–2002 and an enhanced fee-for-service model in 2003. Both models involve patient rostering, incentives for preventive care and requirements for after-hours care. We evaluated practice characteristics and patterns of care under both models.

Methods

Using administrative data, we identified physicians belonging to either the capitation or the enhanced fee-for-service group throughout the period from Sept. 1, 2005, to Aug. 31, 2006, and their enrolled patients. Practices were stratified by location (urban v. rural). We compared the groups in terms of practice characteristics and patterns of care, including comprehensiveness of care, continuity of care, after-hours care, visits to the emergency department and uptake of new patients.

Results

Patients in the capitation and enhanced fee-for-service practices had similar demographic characteristics. Patients in capitation practices had lower morbidity and comorbidity indices. Comprehensiveness and continuity of care were similar between the 2 groups. Compared with patients in enhanced fee-for-service practices, those in capitation practices had less after-hours care (adjusted rate ratio [RR] 0.68, 95% confidence interval [CI] 0.61–0.75) and more visits to emergency departments (adjusted RR 1.20, 95% CI 1.15–1.25). Overall, physicians in the capitation group enrolled fewer new patients than did physicians in the enhanced fee-for-service group (37.0 v. 52.0 per physician); the same was true of new graduates (60.3 v. 72.1 per physician).

Interpretation

Physicians enrolled in the capitation model had different practice characteristics than those in the enhanced fee-for-service model. These characteristics appeared to be pre-existing and not due to enrolment in a new model. Although the capitation model provides an alternative to fee-for-service practice, its characteristics should be the focus of future policy development and research.Primary health care is facing a number of serious challenges internationally, with questions being raised about whether it will even survive in some settings.¹ Fundamental issues include shortages in human resources and maldistribution of physicians; dissatisfaction on the part of providers and patients; gaps between guideline-recommended care and provided care; and a preference of trainees to choose specialty careers. Close to 4 million Canadians do not have a family physician, and more than 2 million report difficulties in accessing routine or ongoing care at any time of day as well as immediate care for minor health problems at any time of day.² Canadians in rural areas face geographic barriers to care, fewer available health care professionals than in urban areas and higher rates of disease.³In response to these challenges, policy-makers in Canada and elsewhere are considering or are implementing interdisciplinary teams, new organizational structures, new governance and reimbursement models, requirements for after-hours care, provision of after-hours advice by telephone, electronic health records and other information technology, and pay-for-performance initiatives. Many of these directions are incorporated in the Medical Home concept in the United States⁴ and in the Quality and Outcomes Framework in the United Kingdom.⁵ Although there is evidence for the effectiveness of some of these initiatives, most have not been rigorously evaluated. Reimbursement models, perhaps the best-studied aspect of primary care reform, seem to influence some aspects of physician behaviour. However, there is a lack of evidence about their ultimate impact on patient outcomes.⁶In Ontario, Canada, a blended capitation model called the Family Health Network was introduced in 2001–2002. An enhanced fee-for-service blended model called the Family Health Group was introduced in 2003. These models rapidly attracted physicians. By 2006, they were the most common models of care in Ontario, exceeding the straight fee-for-service plan.Physicians are free to select one of the models or remain in the straight fee-for-service plan. Many make decisions based on a free revenue analysis that uses their previous billings to project their income under the capitation model. Our evaluation, involving more than 500 physicians and close to half a million patients under the capitation model, is therefore an examination of one of the world’s largest short-term voluntary shifts from fee-for-service to capitation. Our objective was to evaluate practice characteristics and patterns of care under the capitation model, including comprehensiveness, continuity, after-hours care, visits to the emergency department and uptake of unattached patients. We used practices in the enhanced fee-for-service model as a contemporaneous comparison group.