Primary Care Performance in Fee-for-Service and Prepaid Health Care Systems

Abstract

To examine differences in the quality of primary care delivered in prepaid and fee-for-service (FFS) health care systems. Longitudinal study of 1208 adult patients with chronic disease whose health insurance was through a traditional indemnity (FFS) plan, an independent practice association (IPA), or a health maintenance organization (HMO). Both IPA and HMO represent prepaid care systems. Patient- and physician-provided information was obtained by self-administered questionnaires. A total of 303 physician offices (family medicine, general internal medicine, endocrinology, or cardiology) in solo and group practices in three US cities. Seven indicators of primary care quality--accessibility (financial and organizational), continuity, comprehensiveness, coordination, and accountability (interpersonal and technical) of care. Performance on each was evaluated in FFS, IPA, and HMO settings. Analyses controlled for patient and physician characteristics. Financial access was highest in prepaid systems. Organizational access, continuity, and accountability were highest in the FFS system. Coordination was highest and comprehensiveness was lowest in HMOs. The results mark notable differences in core dimensions of primary care quality in each of three payment systems and raise questions regarding the associated cost inefficiencies and outcomes of care. In the current health care delivery reform climate, these findings call for consideration of the relative strengths and weaknesses of each system. We suggest strategies for elevating performance in each.