Table 1.

The potential of monetary incentives in cost-containment policies

Cost-containment instrument	Incentive directed at	Relevant category of care	Potential for cost-containment	Additional comments
Fee-for-service	Providers	Outpatient and inpatient care	Low	• The upward effect of fees on costs can be neutralized, when hard budgets are introduced • The structure and level of fees in the FFS schedule can be changed for cost-containment purposes.
Per diem payment	Providers	Inpatient care	Low	The upward effect of per diem payments on hospital costs can be neutralized, when hard hospital budgets are introduced
Case payment	Providers	Inpatient and outpatient care	Medium	The net effect on cost-containment may be reduced by cost-shifting to other health sectors
Capitation	Providers	Inpatient and outpatient care	Medium	The net effect on cost-containment may be reduced by cost-shifting to other health sectors
Salaries	Providers	Inpatient and outpatient care (worktime of providers only)	High	The overall on cost-containment of national health expenditure depends on provider payment mechanisms introduced for other types of care
Budgets	Providers	Inpatient and outpatient care	High	• The cost-containment efficiency of budgets is low, when budgets are 'soft' • Cost-shifting between sectors may reduce the overall cost-containment potential
Patient charges	Patients	Inpatient and outpatient care	Low	Cost-reductions may be seen with important increases in patient charges, combined with the existence of medium to high price sensitivity
Reference price system	Patients	Pharmaceuticals	Medium	Cost-containment potential will be low, when prescribing of drugs outside the reference-price system remains important