ABSTRACT
The system of paying providers has a major influence on the cost of services and also on the attitudes of providers to users. A more common system, but usually under private health insurance, is for the insurer to reimburse at standard rates laid down in the policy. Patients often complain of lack of common courtesy under this system of payment. A system to be avoided is part-time salaries for primary care doctors. In practice the system encourages patients to go direct to the specialist and this is expensive because specialists tend to order more diagnostic tests than general practitioners. A fee-for-service system is more open to fraud than other systems of payment. A pure capitation system can be modified to take account of special problems. For example, higher capitation payments can be paid for elderly patients, allowances can be added for seniority, for working in remote areas and attendance at continuing education.
