List size disequilibria and service provision in general practice

Several Nordic countries remunerate general practice by a mix of capitation and fee-for-service. From the literature we know that capitation-based payments come with a risk of undersupply of services, whereas fee-for-service comes with a risk of overprovision of services. Previous studies from the Nordic countries assess potential overprovision of services in general practices that are falling short of enlisted patients. However, today the main challenge in general practice is physician shortages, which comes with a risk of underprovision of services. Little is known about whether physician shortage in fact leads to underprovision of services. Using the two-way Mundlak regression on a panel of Danish general practices in 2016-17, this study assesses whether holding a longer than preferred patient list is associated with fewer services per enlisted patient. Around 100 of our sample of 1,652 practices hold longer lists than preferred. These practices have on average an excess of around 80 patients per full time general practitioner. We find little support of the hypothesis that practices with longer than preferred lists provide fewer contacts per patient. Heterogeneity analyses, however, reveal that practices with longer lists tend to provide fewer services to patients with complex needs. Policymakers should therefore be aware that there may be underprovision of services to high-need patients when there is a shortage of GPs.