Exit, Choice or Loyalty : Patient Driven Competition in Primary Care

The questions addressed in this paper are related to access rules to primary care services and the potential for patient driven competition between GPs and specialists. Most of the literature on the performance of primary care has dealt with reforming payment schemes, little attention being paid to access rules, often perceived as immutable. Here on the contrary, the patient's role is reconsidered while taking providers' payment schemes as given (either fee-for-service or capitation). Two access rules are considered in turn: either indirect access to specialist care (gatekeeping) or direct access. They are compared on their performance at minimising both total financial costs and patient's opportunity cost of treatment time. Two types of conditions are considered, with two levels of severity and an equal probability for each of the four events. The results generated under information symmetry show that gatekeeping always dominates in terms of minimising financial cost and that allocative efficiency can be enhanced by granting direct access provided the extra cost is borne by the patient. However, when turning to information asymmetry, results, interestingly, are reversed. Patients' direct access to specialists is shown to be more cost effective. This is due to patients' ability to constrain providers' opportunistic behaviour by "voting with their feet." Beyond increasing allocative efficiency, patient choice is therefore shown, under certain conditions, to contribute towards enhancing productive efficiency. We further show that introducing copayments to share the financial risk implied by direct access weakens patients' ability to curb providers' strategic behaviour. Under information asymmetry, access to specialist care should therefore remain free if patient's disutility in time in care is linear. When patients' disutility in time in care is instead increasing, a copayment is necessary to curb specialists' information rent