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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. www.econstor.eu We study the impact of a mixed capitation model known as the Family Health Organization (FHO) on selected quality and quantity outcomes relative to an enhanced fee-for-service model known as the Family Health Group (FHG) among primary care physicians in Ontario, Canada. Using a panel of administrative data that covers one year before and two years after the FHO model was introduced in 2007, we find that physicians in the FHO model provide about 6 percent fewer services and visits per day, but are between 8 and 15 percent more likely to achieve preventive care bonuses for senior flu shots, toddler immunizations, pap smears, and mammograms compared to physicians in the FHG model. These results are largely consistent with the hypothesis that the mixed payment model may reduce quantity and improve quality of health care relative to the fee-for-service model. We also find that the FHO physicians have lower referral rates and enroll patients of similar complexity compared to the FHG physicians. Terms of use: Documents in D I S C U S S I O N P A P E R S E R I E S NON-TECHNICAL SUMMARYWe study the performance of a blended capitation primary care model relative to an enhanced fee-for-service model in Ontario, Canada. We find that physicians in the blended capitation model provide fewer services and visits but work a similar number of days and have a similar number of enrolled patients. On the other hand, we find that physicians in the blended capitation model are more likely to reach preventive care targets for flu shots, pap smears, mammograms, immunization, and colorectal screening. These results indicate that the blended capitation model may reduce quantity and improve quality of health care relative to the fee-for-service model.JEL Classification: I10, I12, I18

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Pay for performance (P4P) incentives for physicians are generally designed as additional payments that can be paired with any existing payment mechanism such as a salary, fee-for-services and capitation. However, the link between the physician response to performance incentives and the existing payment mechanisms is still not well understood. In this article, we study this link using the recent primary care physician payment reform in Ontario as a natural experiment and the Diabetes Management Incentive as a case study. Using a comprehensive administrative data strategy and a difference-in-differences matching strategy, we find that physicians in a blended capitation model are more responsive to the Diabetes Management Incentive than physicians in an enhanced fee-for-service model. We show that this result implies that the optimal size of P4P incentives vary negatively with the degree of supply-side cost-sharing. These results have important implications for the design of P4P programs and the cost of their implementation.