Completed projects

Primary care payment structures: evidence synthesis
Doctor and patient

The aim will be to conduct a synthesis of the research evidence and wider literature on funding mechanisms for primary care

How do different payment schemes impact on the delivery of primary care with respect to activity, health and costs?

  • How do mixed systems perform with respect to activity, health and costs?
  • Are there specific aspects of a payment scheme that matter more (e.g. size)?
  • How does the impact of different payment schemes depend on other institutional characteristics and in which way?
  • Given this evidence, are there lessons for using particular funding mechanisms for supporting different sorts of primary care activity and achieving different outcomes?

In the UK general practice is funded through the GMS contract. This is made up of a number of key elements:

Global sum and minimum practice guarantee (at least 50% of the practice funding)

  • Enhanced services (Directed Enhanced Services and Locally Commissioned Services Payments)
  • Quality and Outcomes Framework payments
  • Premises payments
  • Seniority payments

Currently the global sum is a capitation payment based on patient numbers and constitutes the major element of payment which is adjusted for population characteristics. Currently QOF constitutes between 20 and 25% of the total contract sum but the scope and payments for QOF are being reduced with some funding included in the global sum.

In other countries there are a mix of payment methods for primary care including block contracting, fee-for-service, capitation. In some cases these are used separately and in others funding methods are blended – as in the UK. Different payment methods are thought to have different impact on physicians’ behaviour. Capitation is believed to encourage cost containment since under this system the amount of physician payment is known before any care is provided and depends on the size of the patient list. On the other hand, under the fee-for-service system, the physician is reimbursed for each item of service provided and payment occurs after care has been provided; therefore this system is thought to incentivise increased activity (consultations, visits, treatments) in order to inflate income. Generally capitation payments may encourage cost containment behaviour and result in under-treatment whereas fee-for-service may encourage over-treatment.

The evidence suggests that it is possible to change GP practice behaviour by changing incentives. There is some evidence that outcomes can be improved in this way, but most of the evidence relates to disease-specific activity. There is little evidence that this saves money overall. Funding is also linked to the way primary medical is organised. However, while the organisation and structure of primary care appears to impact on the quality and range of care provided the evidence suggests that there is not an ‘ideal’ size or organisational model for primary care services.