Be Careful What You Pay For

In Be Careful What You Pay For, Arnold Kling looks at four different ways of compensating physicians for medical care:

• Capitation – pay a fixed amount per year per patient
• Outcome – pay on the basis of the health of patients
• Effort – pay on the basis of labor and capital costs of providing services
• Process – pay on the basis of adherence to guidelines

Each methods has its pitfalls, but Kling argues for process-based compensation.