J. Gillett et al., Capitation and primary care in Canada: Financial incentives and the evolution of health service organizations, INT J HE SE, 31(3), 2001, pp. 583-603
Alternative approaches to the funding, organization, and delivery of primar
y care have been the subject of ongoing discussion and debate in many indus
trialized nations for many years. One common recommendation has been to use
capitation, as opposed to fee-for-service, as the payment method for physi
cians, In this study the authors use data from interviews with physicians a
nd Ministry of Health officials to trace the evolution of Ontario's Health
Service Organization (HSO) program, the only program of capitation-funded p
hysician care in Canada. The program has developed in three phases: formati
on in the early 1970s, expansion in the late 1970s and throughout the 1980s
, and restructuring in the 1990s. The analysis focuses on the perceptions a
nd actions of policymakers and physicians who became involved with the prog
ram at different points in its evolution, and identifies how they perceived
and responded to the financial incentives that were introduced to promote
the program. This case study allows an examination of the shifting objectiv
es, communications, perceptions, and responses of policymakers and stakehol
ders in changing contexts over a period of more than 20 years. The long his
tory of the HSO program provides the opportunity to examine the factors tha
t can cause financial incentives to go awry, The authors suggest how this c
ase study offers lessons for financial incentive policymaking.