The engine of a hospital, or a hospital-driven system, is the push to put bodies in beds and perform procedures on them. The engine of an integrated healthcare system is the insurance premium. For a hospital, a body in a bed is a profit center. For an integrated healthcare system, it's a cost. This shift in incentives echoes down through the system into every tactical and strategic decision.
Capitation is the key to that engine.
Some 55 percent of Sharp's business is government-funded. Of the rest, over 95 percent represent some kind of managed care, across the whole range of risk-sharing. At the other end, pure capitation is increasing. Some branches of the organization, such as the Mission Park Medical Clinic and the Sharp Rees-Stealy Medical Group, do nearly 90 percent of their business in capitated care. Utilization falls, and you get a whole different pattern.