The Future of Capitation

The Physician Role in Managing Change in Practice

Authors

  • John D. Goodson MD,

    Corresponding author
    1. Received from Harvard Medical School, and Massachusetts General Hospital, Boston, Mass (JDG);
      Address correspondence and reprint requests to Dr. Goodson: WAC 625, Massachusetts General Hospital, Boston, MA 02114 (e-mail: jgoodson1@partners.org).
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  • Arlene S. Bierman MD, MS,

    1. Center for Outcomes and Effectiveness Research Agency for Health Care Policy and Research, Rockville, Md (ASB);
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  • Oliver Fein MD,

    1. Department of Clinical Medicine and Clinical Public Health, Weill Medical College of Cornell University, New York, NY (OF);
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  • Kimberly Rask MD, PhD,

    1. Department of Medicine, Emory University School of Medicine, Atlanta, Ga (KR);
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  • Eugene C. Rich MD,

    1. Department of Medicine, Center for Practice Improvement and Outcomes Research, Creighton University School of Medicine, Omaha, Neb (ECR), and
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  • Harry P. Selker MD, MSPH

    1. Division of Clinical Care Research, New England Medical Center, and Department of Medicine, Tufts University School of Medicine, Boston, Mass (HPS).
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Address correspondence and reprint requests to Dr. Goodson: WAC 625, Massachusetts General Hospital, Boston, MA 02114 (e-mail: jgoodson1@partners.org).

Abstract

Capitation-based reimbursement significantly influences the practice of medicine. As physicians, we need to assure that payment models do not jeopardize the care we provide when we accept higher levels of personal financial risk. In this paper, we review the literature relevant to capitation, consider the interaction of financial incentives with physician and medical risk, and conclude that primary care physicians need to work to assure that capitated systems incorporate checks and balances which protect both patients and providers. We offer the following proposals for individuals and groups considering capitated contracts: (1) reimbursement for primary care physicians should recognize both individual patient encounters and the administrative work of patient care management; (2) reimbursement for subspecialists should recognize both access to subspecialty knowledge and expertise as well as patient care encounters, but in some situations, subspecialists may provide the majority of care to individual patients and will be reimbursed as primary care providers; (3) groups of physicians should accept financial risk for patient care only if they have the tools and resources to manage the care; (4) physicians sharing risk for patient care should meet regularly to discuss care and resource management; and (5) physicians must disclose the financial relationships they have with health plans and medical care organizations, and engage patients and communities in discussions about resource allocation. As a payment model, capitation offers opportunities for primary care physicians to influence the future of health care by improving the management of resources at a local level.

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