Keeping German Doctors On A Budget Lowers Costs : NPR:
“How Doctors Get Paid
Nearly all hospital-based doctors are salaried, and those salaries are part of hospital budgets that are negotiated each year between hospitals and ‘sickness funds’ — the 240 nonprofit insurance companies that cover nearly nine out of 10 Germans through their jobs. (About 10 percent, who are generally higher income, opt out of the main system to buy insurance from for-profit companies. A small fraction get tax-subsidized care.)
Office-based doctors in Germany operate much like U.S. physicians do. They’re private entrepreneurs who get a fee from insurers for every visit and every procedure they perform. The big difference is that groups of office-based physicians in every region negotiate with insurers to arrive at collective annual budgets.
Those doctor budgets get divided into quarterly amounts — a limited pot of money for each region. Once doctors collectively use up that money, that’s it — there’s no more until the next quarter.
It’s a powerful incentive for doctors to exercise restraint — not to provide more care than is necessary. But often, the pot of money is exhausted before the end of the quarter.”
Interesting piece from over the Fourth holiday. It was mostly about the last paragraph above: Namely that physicians have to decide whether to continue to provide service until the end of the quarter when the budget is already exhausted. Seems bizarre to physicians here, except that we do the same thing, only play the game differently.
The way we do it is not quarterly, but on an ongoing basis. Most of our patients have insurance that pays us (more or less) what we expect, but a certain percentage have Medicaid or are uninsured altogether or have crappy insurance that doesn’t cover whatever you just took care of, and so on. So the net effect is similar.
But another intersting tidbits is the salaried nature of hospital based physicians. It would be interesting to see what the contracts look like in terms of benefits, vacation, salary, etc.