A PENNY for A GIFT OF SERVICE

"THE PAYMENT SYSTEM AND MECHANISM FOR PAYMENT IN RELATION TO THE PROFESSIONAL ROLES OF MEDICAL DOCTORS"

This topic had been such a hot topic during my group tutorial session. It's always something to put much interest on when it comes to MONEY, don't you think? :) I would like to dedicate a special thanks to the Indonesian friends in my group: Shendy Isyanto and Widyantri Wulandini for their many information shared with us about how doctor's payment in Indonesia is actually is.

Provider Payment Mechanism or simply put as the way of paying the doctors (and other health care-related bodies) are generally categorized into two types:

Let’s focus our discussion on Doctor’s payment which becomes one the most important aspect in DOCTOR’S LIFE SATISFACTION.

 

Notes: minus cost of providing practice and income tax

We move on to each of these income sources. I hope this table I made allowing an easier understanding for everyone :)

SALARY	FEE- FOR- SERVICE	CAPITATION
Monthly payment	Service- based payment	“Per- member- per- month” rate
Medical treatments are not influenced by economic incentive	Market forces mechanism	A fixed payment remitted at regular intervals to a medical provider by a managed care organization for an enrolled patient
Pros
Easier planning and budgeting	·         Increase patient satisfaction as doctors give more attention ·         Doctors are happy as income depends on the productivity	·         For Doctors: Doctor is paid by the insurance company for being listed as that patient's primary provider, even if no services are provided. It’s fixed, monthly. ·         For health insurance companies: Helps control the costs of health care, since providers will not likely recommend unnecessary procedures if they are responsible for the cost of these services.
Cons
Doctors may not deliver service to the fullest because he’ll get his salary regardless how poor his service is.	·         Hard to make a standard fee ·         Tendencies for supplier induced demand ·         Increase health inflation	Decrease patient satisfaction as doctors pay less attention

“FEE- FOR- SERVICE”

Impacts in Indonesia:

1. No standard income (unlimited incentives)

The wide variety of how the payment is made causing confusions of what is the exact appropriate payment for doctors. A doctor works in more than one hospital and more working hours certainly get higher payments compared to a doctor working otherwise. This kind of situations for instance, as what you can see in Indonesia; leads to the increasing gaps of the income between doctors .

 2. Supplier Induced Demand

Doctors intentionally increase the demand of hospital care based on economic incentive, not patient needs. For example, the essential management for patient having non specific low back pain is the prescription of NSAID (one of the analgesics example) and proper rest. But a doctor may inappropriately asked the patient for imaging test or physiotherapy, etc.

“CAPITATION”

I have given the definition and some explanations of capitation on the table above and perhaps my understanding correlated well with the concept:)

It's basically can be like, let say, I have 100 members from Insurance Company Gadjah Mada. The capitated rate is Rp 60 000 per member per month, meaning, I'll receive Rp 6 000 000 per month from Insurance Company Gadjah Mada to manage its 100 members regardless of the number of times that the 100 patients require my services or the amount of health care expenses I incur during this visit.

Many of the patients (insured members) may rarely see me, but I'm paid by the Insurance Company Gadjah Mada for being listed as the patients’ primary provider, even if no services are provided. It's like winning a lottery, eh? ^^

Back to INDEX

References:

• "Provider Payment Mechanisms", Lecture by dr. Laksono Trisnantoro and dr. Sigit Riyarto
• "Physisician Income and Its Impact on Quality: GROUP 8 TUTORIAL SESSIONS (Week 2)
• The American Heritage® Medical Dictionary
• McGraw-Hill Concise Dictionary of Modern Medicine
• AMERICAN COLLEGE OF PHYSICIANS: Understanding Capitation
• Case management: a practical guide to success in managed care