PHYSICIAN RESPONSES TO GLOBAL PHYSICIAN EXPENDITURE BUDGETS IN CANADA- A COMMON PROPERTY PERSPECTIVE

Global expenditure budgets in the fee-for-service physician sector cre ate management problems for both funders and physicians. Global expend iture cap policies must be designed, and appropriate institutional str uctures created, to mitigate perverse utilization incentives, manage c ollective utilization, and diffuse the internal professional and the f under-profession tensions created by a capped budget. Two Canadian pro vinces that adopted different approaches to the design of their physic ian expenditure cap policies experienced different outcomes in utiliza tion growth. The outcomes, however, are the opposite to what one would predict based on an analysis of the incentive structures embodied in the two provinces' policies. An analytic framework developed for the s tudy of common-property resources is applied to the differing physicia n responses to global budgets across the two provinces. The insights o ffered by this framework can guide policy design for global physician budgets, and they indicate the critical importance of physician accept ance of such a policy.