The Differences and Similarities of For-service and Capitation Systems Use in the U.S

Healthcare Delivery Systems
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Institution
Healthcare Delivery Systems
The United States has two major health care delivery systems namely the fee-for-service and capitation systems. These systems are used in an alternating manner in the United States and each one has a group of people that are subscribed to it. In the capitation mode of payment, doctors are reimbursed a certain amount of money for each patient that they treat while under the fee for service system, doctors receive payment on the basis of the procedures that they use to offer treatment. This paper examines the differences and similarities between these two procedures as well as a discussion of the model that has been commonly in use in the United States.
The traditional system of health care that has been in use in the United States is the fee-for-service. Under this model, a patient goes to a health care practitioner and offers payment for the service that has been accorded to them. Under this model of payment, insurance companies assume the biggest risk as they are the main payers of patient fees in the US. This is done as a way of ensuring that risk is diversified and as such the payment done through this means is relatively low. In the United States, the health care that is paid in the absence of private insurance is predominantly on the basis of FFS while the various insurance schemes rely on capitation.
Under the capitation system of health care, health care service providers get a fixed amount of money for each individual that has been assigned to their care. This is done regardless of whether the individual seeks for their services or not. This is the system that is preferred by most doctors as a large number of people do not seek medical treatment even when they are sick. This leaves the doctors at an advantage as they end up receiving compensation for work that they have not done. Under this scheme, the amount of money that individuals get is based on the expected level of use of the individual patients. This means that the elderly who are expected to seek medical treatment more or people with preexisting conditions who are likely to consult physician help more are allocated more money as compared to individuals that are perfectly healthy. The capitation system of health care provision is preferred by many as it accords a certain level of certainty for both the hospital and the doctor and even the insurance companies in the aspects of care delivery. The providers (doctors) assume the risk of seeing more patients at a reduced fee in the event that there is an outbreak since the amount that is allocated to them does not change regardless of the number of times that the patient goes to the hospital.
On the other hand, the FFS payments are made on the basis of invoices for services that have been tendered. Under this scheme, no party has any assurance regarding the surety of the medical costs. If there is an overrun of the people that need medical care at a certain time, then the insurance provider assumes this risk and not the doctors as in the case of the capitation system. While the capitation system has been the most popular, some doctors are moving away from it due the feeling that they end up utilizing a large portion of their res...