What is a common outcome of capitation payment models for healthcare providers?

Capitation payment models fundamentally change the way healthcare providers are compensated, providing them with a fixed amount of money per patient over a certain period, regardless of the number of services provided. This model incentivizes providers to manage patient care more efficiently, as they keep any savings generated from reduced over-utilization of services.

When providers receive a set amount for each patient, they face increased financial risk. If the costs of the services provided exceed the capitation amount they receive, providers could face losses. This risk encourages providers to focus on preventive care and to manage resources wisely, as they need to maintain quality care while staying within the financial limits set by the capitated payment.

This model contrasts with fee-for-service models, where providers are compensated for each service rendered, potentially leading to higher utilization rates. In capitation, the financial stakes prompt a shift towards more proactive care management and may also drive innovation in care delivery, although it does come with the increased risk noted.