Capitation Payor System

Response Post: Capitation Payor System
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Response Post: Capitation Payor System
Kenen (2016) noted that the capitation payor system encourages healthcare providers to limit unnecessary health care services that increase costs without creating value. Although capitation offers an avenue to enhance healthcare quality and lower costs, it undermines physician’s practice environment and motivation, which could negatively affect patient outcomes. Capitation controls medical care resources utilization by shifting the financial risk to the physician for services offered to patients. This is realized by paying the physician a fixed amount in advance per patient per time unit for healthcare services delivered, particularly based on capitation rates. However, I think this practice undermines the volume and quality of services offered to the patient since the physician could lack the incentive to offer optimal care since reimbursement is withheld until the fiscal year culmination. In add...