Talk:Capitation (healthcare)

Implications
"Since capitation does not reimburse physicians any more for taking care of their patients, and visits and procedures cost money, the contracting physicians essentially lose money for each visit or procedure." First of all, this needs a reference. Secondly, does this sentence even make sense? Do physicians make less money in total for each visit or procedure? What is "essentially" here for? The costs of medications, equipment, etc. are surely not paid by the physicians themselves... perhaps it is better to say "there is no financial incentive to treat additional patients." Palanq (talk) 16:49, 22 June 2010 (UTC)


 * Their income per patient is fixed under capitation. If a patient doesn't come in to see them that income is almost all profit.  If the patient does come in, it reduces their profit.  If too many patients come in one month they use up all the profit and start making a loss.  The "essentially lose money" could be stated better but it is fundamental economics and I don't think it needs a reference. 69.255.153.68 (talk) 13:21, 28 June 2011 (UTC)


 * I rewrote/renamed the section. Jesanj (talk) 13:36, 28 June 2011 (UTC)


 * Let's see if this modest explanation helps. Providers get a set fee, the capitation payment, in lieu of managing the care of all their capitated patients. To keep it simple lets assume that they get $3,000 per year/per patient and they have a patient roster of 10,000 for gross revenues of $30,000,000. If the provider's costs exceed $30,000,000 they lose money. Now, the reason the risk transferring entity wants to pay through capitation is that patients are notoriously bad about planning their health care needs.

They tend to come in for unscheduled surgeries, unplanned cancer treatments, dismemberments, pneumonia. All sorts of things it would have been far more convenient if they had scheduled in advance.

Very little of this is under the direct control of the provider. Providers cannot go back and take a Big Mac out of someone's mouth 20 years before they met them, but that eating behavior contributed to their coronary artery disease and their need for a bypass.

The problem providers have is that under fee for service a perfectly ethical and efficient provider might incur treatment costs that are 25% of, 100% of, or 250% of their aggregate annual capitation payments.. These costs can come all year long, in a single month, conceivably in a single day. The gross amount of the payment they receive sets an upper limit on how much care the provider can furnish throught the contract period.

That limit does not exist in a fee for service system. If an efficient provider's patients are sicker than average, under fee for service, the provider earns additional revenues caring for their patients.

In a capitation system, if an efficient provider's patients are sicker than average, the provider expends their finite funds at an accelerated pace. Even if a capitated patients payments legitimately require 150% of the average level of care, for any reason at all - maybe a factory accident, a communicable disease, a school shooting the provider, not the risk transferring insurer is on the hook for a substantial portion of those costs which are higher than usual and higher than their gross revenues for the year.

Providers can ignore this jeopardy or they can adjust to it. As to the issue of why hasn't it become obvious? Three pieces.

One is that the capitation advocates are not looking go evidence against it - the flaws are too severe for them not to know what is happening.

That leaves it to people who have no real idea what is happening and then there is me.

I actually do understand exactly what is happening because I am a nurse, statistician, worked for almost a decade in insurance ratemaking and reserving.

Some insurers fail every year - generally small insurers, often the size of a capitated health care provider.

In health care, failed providers bottom out and they are taken over by larger, more successful providers. The owners get bought out and the names change on the door.

How anyone can question the disincentive to aggressively diagnose and treat is likely as hard for me to understand as it is for that person to understand why undertreatment is an absolute necessity whenever capitation is implemented.

But I just came out with a new book on it - and maybe I did a better job this time around.

But a distinct advantage of wikipedia is that it doesn't have the inherent biases of most journals and their editors. I know my chgaracterization of capitation is not main stream - but it does have the luxury of being correct whereas most of the material written about capitation is not. — Preceding unsigned comment added by Drtcbear (talk • contribs) 03:07, 14 September 2012 (UTC)

Pay for providers under capitation.
I think this article should state if providers have to pay for tests they order or if the cost of tests is partially or fully deducted from the amount they are paid for providing medical care for a patient.

I think this article should state if providers make less money if they refer a patient to a specialist.

I think this article should state if the cost of prescription drugs are partially or fully deducted from the amount providers are paid for providing medical care for a patient.

Neutrino1200 (talk) 17:03, 9 September 2011 (UTC)

Hi Neutrino,

Yes, it would be nice if there was a crystal clear capitation contract. The contracts themselves are considered proprietary6 and providers sign off on non-disclosure agreements.

So we rarely know the answer to your query except some of your concerns exist in various capitation agreements.

So, a global capitation contract would certainly entail routine testing and health screenings. Thos blood and urine tests are highly likely to be covered by the capitation contract.

Not so clear would be MRIs and cat scans. They may or may not be covered.

Same thing with prescription drugs - though there are still external constraints - providers who over-prescribe expensive drugs that they are not obliged to cover and they will hear about it in regular meetings and may ene du without new contracts.

Hope this helps some... — Preceding unsigned comment added by Drtcbear (talk • contribs) 03:13, 14 September 2012 (UTC)

How come THIS subjective information gets to pollute this place, however, my information about other topics, which is much more objective, was deemed not acceptable, even though it was full of fact and not opinion? Wiki is on the fast track to irrelevance. — Preceding unsigned comment added by 69.15.216.245 (talk) 14:28, 21 August 2013 (UTC)

Well, Special:Contributions/69.15.216.245... I'd guess that the fact that your post doesn't actually provide any facts and that you don't give your name might have something to do with it. Thomas Cox — Preceding unsigned comment added by 70.185.113.113 (talk) 15:54, 15 October 2016 (UTC)

The text is largely an argument against capitation rather than a neutral description of it as of February 8, 2016 80.102.200.9 (talk) 20:54, 8 February 2016 (UTC)

Need elaboration and/or citation referring to the part of
Reinsurance=== ==


 * I did the translation of this Subject into traditional Chinese in August of 2020, and I start editing the article today. Unfortunately I just couldn't find any reliable citation to support the following:

"Providers cannot afford reinsurance, which would further deplete their inadequate capitation payments, as the reinsurer's expected loss costs, expenses, profits and risk loads must be paid by the providers. The goal of reinsurance is to offload risk and reward to the reinsurer in return for more stable operating results, but the provider's additional costs make that impractical." Can anybody help? ThanksThomasYehYeh (talk) 11:51, 7 March 2021 (UTC)

Health care preferred over healthcare?
Should the article be renamed Capitation (health care)? — Preceding unsigned comment added by Oceanflynn (talk • contribs) 19:27, 20 December 2022 (UTC)