The Role of Government in Physician Reimbursement

Governments around the world exert a substantial degree of influence over physician reimbursement, but the structure and level of that influence varies greatly. This article defines and analyzes the role of government in physician reimbursement both internationally and in the United States.

We create a typology for government involvement in physician reimbursement that divides intervention into either direct control or indirect control. Within those broad categories, we describe more specific forms of involvement including rate setting, operating as a public payer, employing physicians directly, providing a source of market discipline, regulating private insurance, and convening private participants in the market.

We apply our framework to the modern healthcare systems of Germany, Sweden, Canada, and the United States, highlighting some of the implications of differences between the systems. Our central finding is that in contrast to other example healthcare systems, the United States system features a complex interplay of federal and state government influence, both direct and indirect, into physician reimbursement.

We conclude the article by examining the ways in which recent legislation including the Affordable Care Act and the Medicare Access and CHIP Reauthorization Act would likely change the role of government in physician reimbursement in the United States.