Balanced scale with hospital, money, and quality symbols.

Is Your Healthcare in Check? Unveiling the Real Impact of Payment Systems on Quality

Avery Sinclair in Health & Wellness November 2025 • 4 min read.

"Discover how mixed compensation models for specialists are affecting re-hospitalization and mortality rates, and what it means for your health."

In an era where healthcare costs are skyrocketing, it's more important than ever to understand how our healthcare systems are structured and how they impact the quality of care we receive. From the aging population to the rise of sophisticated medical technologies, numerous factors contribute to the increasing financial burden of healthcare. But one critical, often overlooked aspect is the way physicians are compensated.

The design of physician payment mechanisms is a central element in healthcare policy. Payment structures influence both the quantity and quality of medical services, making it a key consideration for governments and healthcare administrators alike. In Canada, where public funds largely support healthcare, physician spending constitutes a significant portion of the total healthcare expenditure.

A recent study analyzes the effects of mixed compensation (MC) schemes on the quality of healthcare services provided by specialists. By examining a reform implemented in Quebec, Canada, the study sheds light on how changes in payment structures can impact patient outcomes, offering valuable insights for policymakers and individuals alike.

Mixed Compensation: What is it and How Does it Work?

Balanced scale with hospital, money, and quality symbols.

Mixed compensation systems combine elements of fee-for-service (FFS), capitation, and salary models. The Quebec reform, introduced in 1999, combined a per diem payment for time spent in the hospital with a reduced fee per clinical service. This approach aimed to balance the incentives for providing both a high volume of services (as in FFS) and spending adequate time with each patient.

Prior to the reform, most specialists in Quebec were paid through an FFS system, where compensation was directly tied to the number of services provided. Under the MC system, specialists receive a wage for their time in the hospital, regardless of the number of patients they see. This shift was intended to allow doctors to spend more time on administrative, teaching, and complex cases without financial penalty.

Increased time for non-clinical tasks.
Potential for minimum-effort work standards.
Shift from clinical to nonclinical services.

While previous research has focused on the volume of services provided under the MC system, this recent study delves into the more critical question of healthcare quality. Did the reform lead to doctors substituting quality for quantity? And how do these changes ultimately affect patient outcomes?

The Bottom Line: Is Mixed Compensation Working?

The study's findings suggest that the MC reform may have inadvertently reduced the quality of specialist services. The risk of re-hospitalization within 30 days increased by 17.8%, and the risk of death within one year after discharge rose by 6.2%. These are not just numbers; they represent real impacts on people’s lives.

About this Article -

This article was crafted using a human-AI hybrid and collaborative approach. AI assisted our team with initial drafting, research insights, identifying key questions, and image generation. Our human editors guided topic selection, defined the angle, structured the content, ensured factual accuracy and relevance, refined the tone, and conducted thorough editing to deliver helpful, high-quality information.See our About page for more information.

This article is based on research published under:

DOI-LINK: https://doi.org/10.48550/arXiv.2402.04472,

Title: Healthcare Quality By Specialists Under A Mixed Compensation System: An Empirical Analysis

Subject: econ.gn q-fin.ec

Authors: Damien Echevin, Bernard Fortin, Aristide Houndetoungan

Published: 06-02-2024

Everything You Need To Know

What is Mixed Compensation (MC) and how does it differ from Fee-For-Service (FFS) in healthcare?

Mixed Compensation (MC) is a payment model that blends various compensation methods like fee-for-service (FFS), capitation, and salary. The Quebec reform, mentioned in the context, combined a per diem payment with a reduced fee per clinical service. In contrast, Fee-For-Service (FFS) directly ties physician compensation to the number of services provided. Under FFS, doctors are incentivized to provide a high volume of services to increase their income, potentially at the expense of time spent with each patient or focusing on complex cases. The MC model, by incorporating a per diem element, aimed to balance these incentives, allowing specialists to dedicate more time to non-clinical tasks, teaching, and complicated cases without facing financial penalties tied solely to service volume.

What were the primary goals of implementing the Mixed Compensation (MC) system in Quebec, Canada?

The primary goals of the Mixed Compensation (MC) system in Quebec, Canada were to balance the incentives for providing both a high volume of services and spending adequate time with each patient. By combining a per diem payment with a reduced fee per clinical service, the reform intended to allow doctors to spend more time on administrative tasks, teaching, and complex cases without financial penalties. The shift aimed to move away from the sole emphasis on the quantity of services provided under the Fee-For-Service (FFS) system, where physicians were primarily compensated based on the volume of services they delivered.

What specific findings from the study highlight the impact of Mixed Compensation (MC) on patient outcomes?

The study examining the Mixed Compensation (MC) reform in Quebec revealed several concerning impacts on patient outcomes. The findings indicated that the risk of re-hospitalization within 30 days increased by 17.8% under the MC system. Furthermore, the risk of death within one year after discharge rose by 6.2%. These statistics suggest a potential reduction in the quality of specialist services, as the MC system may have inadvertently led to specialists substituting quality for quantity, affecting the care patients received.

How did the Mixed Compensation (MC) system affect the incentives for specialists compared to the Fee-For-Service (FFS) model?

The Mixed Compensation (MC) system altered the incentives for specialists compared to the Fee-For-Service (FFS) model by introducing a per diem payment alongside a reduced fee per clinical service. In an FFS model, specialists are primarily incentivized to provide more services to increase their income. Under MC, the specialists receive a wage for their time in the hospital, regardless of the number of patients they see. This shift was intended to allow doctors to spend more time on administrative, teaching, and complex cases without facing financial penalties tied solely to service volume. This approach aimed to balance incentives and allow more time to non clinical tasks, potentially affecting the quality of healthcare delivery.

What are the potential implications of the study's findings on Mixed Compensation (MC) for healthcare policy and patient care?

The study's findings on Mixed Compensation (MC) have significant implications for healthcare policy and patient care. The observed increase in re-hospitalization and mortality rates raises concerns about the quality of specialist services under the MC system. Policymakers should carefully evaluate the effectiveness of MC models and consider potential adjustments to optimize patient outcomes. This may involve reevaluating the balance between the per diem payment and the reduced fee for clinical services, and exploring alternative compensation models that better incentivize quality of care. Patients should be aware of these potential impacts and be prepared to discuss any concerns with their healthcare providers, particularly regarding the quality of care they receive.