Capitation
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Health Science
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Nov 24, 2024
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Capitation
Capitation is a healthcare monthly payment mechanism in which providers receive a set
amount of money regardless of the services provided. The inclusion and execution of capitation
plans can have a variety of consequences on a corporation, and whether or not it enhances an
organization is determined by a number of criteria (Emanuel et al., 2021). When applied,
capitation has beneficial and negative impacts on a healthcare facility. Positive consequences
include, for example:
1.
Care Coordination: Capitation can improve care coordination among various healthcare
professionals. Because fixed payment covers a wide range of healthcare services,
providers are encouraged to work together to ensure that patients receive the appropriate
care from various experts or healthcare venues (Emanuel et al., 2021).
2.
Cost Predictability: Capitation provides healthcare businesses with cost predictability.
Because providers receive a fixed payment per patient, they can better predict their
revenue stream, allowing for more accurate financial planning and budgeting.
3.
Preventive Care Incentive: Capitation can encourage clinicians to focus on preventative
care and early intervention. Because clinicians receive a fixed payment per patient, they
have a financial incentive to keep their patients healthy and manage health conditions
before they worsen, which can contribute to better overall health outcomes (Aryani,
2022).
4.
Enhanced Efficiency: Capitation can push providers to streamline their operations and
develop more cost-effective ways to offer care. Providers can adapt care coordination,
disease management programs, and effective resource usage by controlling a defined
population's health, potentially lowering healthcare expenditures.
The negative effects of implementing capitation in a healthcare setting include;
1.
Data Accuracy and Risk Adjustment: Capitation plans require accurate patient data to
allocate appropriate payment amounts. Inadequate risk adjustment procedures or
inaccurate data might result in uneven payments that may disfavour clinicians treating
sicker or more medically complicated populations.
2.
Financial Risk: Capitation transfers financial risk away from insurers and onto providers.
Providers may incur financial losses if the fixed payments are insufficient to cover the
real service cost. This danger is especially severe if practitioners serve a population with
complicated health requirements or if patient health profiles vary significantly.
3.
Limited Provider Choice: Capitation plans sometimes limit patients' provider selection to
a network or panel of healthcare experts (Emanuel et al., 2021). Patients who cherish the
flexibility to choose their healthcare providers may view this restriction negatively.
4.
Incentive for Under-Provision of Care: There is a risk that under a capitation payment
model, providers may be encouraged to limit the provision of care to reduce costs and
maximize profit margins. This could result in patients receiving poor or delayed care.
Is Capitation a good or bad decision for a healthcare setup?
Accepting capitation health insurance is a good or bad move depending on the conditions
of the healthcare institution. There are a variety of considerations that healthcare organizations
should consider before making a decision. These are; the healthcare organization's finances, the
population it serves, the level of risk it is willing to take, and its capacity to manage services and
costs effectively under a capitated model (Aryani, 2022). Capitation can provide stability,
promote preventive care, and encourage cost-effective procedures for particular businesses.
However, it carries financial risks and may necessitate large investments in care coordination,
data administration, and risk adjustment systems. Organizations adopting capitation should
carefully consider the potential benefits and challenges and their capabilities to implement and
administer this payment model efficiently.
References
Aryani, A. D. (2022). A Factors Affecting the Achievements of Performance-Based Capitation: A
Scoping Review. Jurnal Jaminan Kesehatan Nasional, 2(1).
https://pdfs.semanticscholar.org/1f5b/4a4a7078495090202a936474d88c9e8e1dfd.pdf
Emanuel, E. J., Mostashari, F., & Navathe, A. S. (2021). Designing a successful primary care
physician capitation model. JAMA, 325(20), 2043-2044.
https://jamanetwork.com/journals/jama/article-abstract/2780026
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