Be Careful What You Pay For

Saturday, June 18th, 2005

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.

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