Can fee-for-service reimbursement coexist with demand creation?

Abstract

A most troublesome question is whether phy? sicians create their own demand. Many re? searchers and policymakers have given their best to the issue. Depending on what one be? lieves, policy recommendations for physician reimbursement range from removing all con? straints on physicians' fees to paying all phy? sicians on either a salary or capitation basis. To date, an extensive body of theoretical and empirical evidence has been marshalled. Yet, as has been conclusively shown in at least two critical surveys, the results are ambiguous.1 For those not fully immersed in the debate, a brief summary is in order. The concept of physician-created demand or demand-induce? ment refers to physicians' alleged ability to shift patients' demand for medical care at a given price, that is, to convince patients to increase their use of medical care without low?