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Incentives to care for health equity

Picture with test tube for blood sample
A key goal of public health systems is to reduce existing socioeconomic disparities in health. Photo: Kennet Ruona

A key goal of public health systems is to reduce existing socioeconomic disparities in health. Yet, the economic incentives facing healthcare providers sometimes work in the other direction. Specifically, when providers are remunerated by a fixed sum for taking the overall responsibility for a given patient, they are incentivised to avoid or undertreat patients whose care needs are relatively large.

In a new study, a group of health economists evaluated a Swedish policy reform aimed at mitigating such effects by linking the size of the remuneration to the patients’ morbidity and socioeconomic status (SES). Focusing on patients with a chronic condition, the researchers showed that it became substantially more profitable to take responsibility for low-SES patients, both in absolute terms and relative to high-SES patients, after the reform. Nevertheless, they found no evidence that the policy affected care use patterns, suggesting that it did not help to reduce existing disparities in health. 

According to the authors, the results are not surprising. “Paying providers more for having registered certain patients is a very indirect way to stimulate increased care provision to the same patients”, says Lina Maria Ellegård, one of the authors. “There are no strings attached to this type of remuneration. Providers may find it optimal to use the money to care for other patients, or just keep them as profits. Paying providers at least partly based on the services provided gives more direct incentives to treat high-need patients.”

Anell, A, Dackehag, M, Dietrichson, J, Ellegård LM, Kjellsson, G (2024), Better off by risk adjustment? Socioeconomic disparities in care utilization in Sweden following a payment reform, Journal of Policy Analysis and Management. Online Library