Remuneration of General Practitioners


Remuneration can be referred to as the average gross annual income that is comprised of social security contributions as well as income taxes which is being payable by the employee. General practitioner is comprised of fully qualified general practitioners. The payment method assist in making creation of stronger incentives for the doctors in order top locate their practice within higher density areas (Armstrong and Murlis, 2007). The present investigation on remuneration to general practitioners three alternative models for payment to general practitioners have been included. Further it is comprised remuneration system that is most likely to cause supplier induced demand.

A) Three alternative models for paying general practitioners

There is presence of three models that are being used by health care market for the sake of making payment to general practitioner. This has been enumerated in the manner as below:

Fee for service: In this kind of model the practitioners are being paid on basis of particular amount in accordance with the service that is being offered. The system of payment laid emphasis on the role of fees for service model as it offers the general practitioners in increasing the scope towards gaining insight to carrying out the behaviour synonymous with SID. This is being based upon the level of activity. The practitioners are being paid a fee for each unit of the care which they delivers. This is in accordance with fixed price schedule (Cumbi and, 2007). Under this system the financial risk is borne by the payer. As the payment is associated with the output thus particular system incentivise the greater utilization of the services as well as increase in cost. The general practitioners are incentivised for the sake of increasing the volume of their activities and attracts greater number of patients, work for longer time and lay emphasis on payment of fees for the services for increasing the income.

Capitation: It is the type model in which practitioners are paid on certain per capital amounts per enrolled patients on the basis of specific area. In similar words it is the kind of contract the payment is based on per person. They are sometimes risk adjusted for the sake of accounting the differences within the age as well as health distribution of the population of patients across physicians (Dahrouge and, 2012). Capitation has been developed in order to incentivise the cost containment. Under this the scope as well as gatekeeper role of the general practitioner becomes limited. In addition to this they can have incentive in order to make selection of the patient avoiding the one with higher levels.

Salary: Under this the practitioners are being paid the lump sum which is being defined regardless the number or mix of services that is offered. It is the kind of system wherein income of the physician is dependent on the number of periods performed. The general practitioner is being paid fixed amount of money for a particular amount of hours for which the work has been done.

B) Remuneration system that is most likely to cause supplier induced demand (SID)

Supplier induced demand can take place while the asymmetry of the data is present between the consumer as well as supplier. The supplier can make utilization of the data for the sake of promoting the person to demand a huge quantity of the good and services they supply in comparison with Pareto efficient level where asymmetric information does not exist. The result of such relates with the welfare loss. SID can enhance expenditure of healthcare, bring enhancement in the financial pressures on the public health insurance programs and improve the share of national resources which are being spent over healthcare (Fujisawa and Lafortune, 2008). SID is being proposed as one of the possible reasons for wider variations within the costs of medical care. Supplier induced demand takes place when the general practitioner make use of superior knowledge for the sake of increase the demand of medical services for the patients beyond such is recommended as it is deemed by the fully informed patients. There is existence of supplier induced demand and this has greater impact on the health care use as well as variation within the prices then health policy constraints has to be focused upon the supply side for sake of controlling the behaviour of practitioner. One of the defining feature associated with the healthcare market is larger knowledge gap among the doctor and patient. Because of such asymmetry of the knowledge as well as higher cost as well as difficulty in gaining fuller knowledge, patients are dependent on doctors for advising the suitable amount as well as kind of services which is required for the sake of improving their health.

C) Comparison of three remuneration systems

The three remuneration system includes fee for service, capitation system as well as blended capitation payment schemes. It has been assessed that fee for service is one that is activity based and under this payment of the fees is done for each unit of the care that is being delivered (Houle and, 2012). In contrast to this capitation system is on a per person basis. Under this the general practitioner are being paid fixed, upfront rate per person who is enrolled within the list apart from the type as well as amount of services which is being utilized. On the contrary salary system is the income of the practitioner which is dependent over the number of periods work has been performed.

It has been determined that mostly blended payment system is being found. Pure payment method such as three major ones are combined into more complex method of payment which purport to possess more desirable mix of incentives and avoids certain adverse incentive of simple payment method (GP payment schemes review, 2014). This model is is comprised of partial capitation that is combining fees for service payment for the subset of the services along with the capitation for the services that are lesser amenable to production of piece rate. In addition to this it is comprised of mixed models which blends elements of capitation payment, pay for performance incentives as well as fee for service. This is comprised of the bundled payments that makes payment to the accountable provider form a fixed amount for greater number of services that are needed for treating episode of care. This method is considered sophisticated as it assist in making fair payment to the general practitioner. Further the complex method of payment can result in creating own set of perverting activities.


It can be concluded from the present study that method of payment that is remuneration is considered important as it assist in making creation of stronger incentives for the doctors in order top locate their practice within higher density areas. Along with this it has been inferred that there is presence of three method of payment. This is comprised of fee for service, capitation as well as salary. All the three differs from one another to a greater extent. Along with this Supplier induced demand takes place when the general practitioner make use of superior knowledge for the sake of increase the demand of medical services for the patients beyond such is recommended as it is deemed by the fully informed patients.


  • Armstrong, M. and Murlis, H., 2007. Reward management: A handbook of remuneration strategy and practice. Kogan Page Publishers.
  • Cumbi, A. and, 2007. Major surgery delegation to mid-level health practitioners in Mozambique: health professionals' perceptions. Human Resources for Health. 5(1). pp.27.
  • Dahrouge, S. and, 2012. Impact of remuneration and organizational factors on completing preventive manoeuvres in primary care practices. Canadian Medical Association Journal. 184(2). pp.E135-E143.
  • Fujisawa, R. and Lafortune, G., 2008. The remuneration of general practitioners and specialists in 14 OECD countries.
  • Houle, S.K. and, 2012. Does performance-based remuneration for individual health care practitioners affect patient care?: a systematic review. Annals of Internal Medicine. 157(12). pp.889-899.
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