Increasing capitation in mixed remuneration schemes: Effects on service provision and process quality of care

Many health systems apply mixed remuneration schemes for general practitioners, but little is known about the effects on service provision of changing the relative mix of fee for services and capitation. We apply difference-in-differences analyses to evaluate a reform that effectively reversed the mix between fee for services and capitation from 80/20 to 20/80 for patients with type 2 diabetes. Our results show reductions in provision of both the contact services that became capitated and in other non-capitated (still-billable) services. Reduced provision also occurred for guideline-recommended process quality services. We find that the effects are mainly driven by patients with co-morbidities and by general practitioners with high income, relatively many diabetes patients, and solo practitioners. Thus, increasing capitation in a mixed remuneration schemes appears to reduce service provision for patients with type 2 diabetes monitored in general practice with a risk of unwanted quality effects.