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Revista Panamericana de Salud Pública

On-line version ISSN 1680-5348Print version ISSN 1020-4989


ALVAREZ, Begoña; PELLISE, Laura  and  LOBO, Félix. Payment systems for health services providers in countries of Latin America and of the OECD. Rev Panam Salud Publica [online]. 2000, vol.8, n.1-2, pp.55-70. ISSN 1680-5348.

The system used to pay health services providers is one of the most important components of the contractual relationship between persons who receive health services and the individual practitioners and institutions that provide those services. That payment system is also relevant in assessing a health system, including its efficiency and quality. In this article we present a simple analytical framework for various payment systems. We also provide an overview of the payment approaches used in two groups of countries whose experiences we consider representative: 10 nations of the Organization for Economic Cooperation and Development (OECD) and four countries of Latin America. We present a basic model to characterize the different forms of payment based on two dimensions. One of the dimensions is the payment "unit," which is used to measure the amount of health care services provided or promised. The other dimension is the distribution of financial risks between the service provider and the service purchaser. Each payment system has advantages and disadvantages that should be evaluated in relation to the intended objectives. On one extreme of the approaches is fixed remuneration, without any adjustments; it represents the purest prepayment approach. One example of fixed remuneration is capitated payment, in which providers carry all the financial risks coming from the variability in the cost of providing services. On the other extreme is fee-for-service payment, where service providers are not at financial risk; the insurer or other financing institution carries all the risk from variable costs. Neither of the extremes appears to be the best choice, and so the issue becomes one of selecting a remuneration system that falls between those extremes. Therefore, it is necessary to choose, on the one hand, the optimal payment unit according to the objectives of the financing entity and, on the other hand, a risk distribution approach that allocates to the service provider the risks coming from greater or less efficiency in delivering services.

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