GPs' payment contracts and their referral practice

This paper compares the role of general practitioners in determining access to specialists in two types of health care systems: gate-keeping systems, where a general practitioner (GP) referral is compulsory to visit a specialist, and non-gate-keeping systems, where this referral is optional. We model the dependence between the GP's diagnosis effort and her referral behaviour, and identify the optimal contracts that induce the best behaviour from a public insurer's point of view, where there is asymmetry of information between the insurer and the GP regarding diagnosis effort and referral decisions. We show that gate keeping is superior wherever GP's incentives matter. (C) 2003 Elsevier Science B.V. All rights reserved.