How to Pay Family Doctors: Why "Pay per Patient" is Better Than Fee for Service

Physician compensation accounts for about one-fifth of all Canadian healthcare spending. But physicians’ decisions, particularly those made by primary care doctors, are the conduit for the majority of the system’s costs. The incentives physicians have to promote efficiency, therefore, affect the overall quality and value of healthcare services. We believe that a remuneration model for primary care doctors that emphasizes per-patient payments is the best way for health systems to pay its front-line doctors, although it is less applicable to specialists. Further, we believe that over time the capitation scheme could be extended so that primary care physicians would keep track of the costs of their referrals and prescribed treatments, to encourage the most appropriate and cost-effective methods of treatment and make better use of total health system resources.