Straight salary model: It’s an often a form of payment in big corporate with a fixed income level. In case of bonuses, physicians must enquire about it and the sum incorporated in the salary. It advantageous in that offers a sense of security, but on the other hand, it provides little long-term financial incentive
Fee for service: This model depends on the quantity of care services provided by the physicians. Services are split and paid for separately according to the agreement on the charges between the payer and the physician i.e. payment for each service. The strength is that there is flexibility in charging the services providing a stable flow of revenue. On the other hand, it results in reduced integrated care efficiency (Quinn, 2015).
Capitation: It involves payment of set of specific services allocated to a group of physicians who enrolled to the service performance. It facilitates cost management, reducing the cost of healthcare as the payers have already an estimate of the cost based on physician’s payment. It also motivates physicians who provide cost-effective care. However, it does not provide extra facilities to treat catastrophic diagnoses and it is challenging to obtain physicians delivering the fixed payment level
Equal share model: It involves the equal distribution of revenue among the group of the physician after computation of all expenses. On strengths and weaknesses: It’s easy to use and facilitate proper management of resources, it also motivates the physicians. However, it promotes conflicts in compensation due to different skill level. An equal share discourages high productivity.
1. Quinn, K. (2015). The 8 Basic Payment Methods in Health Care8 Basic Payment Methods in Health Care. Annals of internal medicine, 163(4), 300-306.