The managed care environment needs physicians who appropriately keep patients out of the hospital and avoid unnecessary referrals through preventive care and other primary care services. There is a new game called managed health care that we didn t learn in medical school. For primary care physicians, Reeb says, the emphasis will be on the management aspects of care, and economic incentives will come from a redistribution in health care spending, all of which will be facilitated by capitated reimbursement.
Capitation challenges providers to know the costs of the services they provide.
The annual rates are multiplied by the unit cost of each service and divided by 12 to determine Per Member Per Month cost. This method works best when more sophisticated calculations are unnecessary because the patient mix and experience have been stable for some time. PCP would be paid this amount at or around the beginning of each month regardless of the number, scope or intensity of services provided. This method provides more protection to the payer but the payment to provider fluctuates with premium changes. Providers need to understand the plan's marketing and pricing strategies to be sure the mix of patients it is attracting does not increase the amount of risk the provider originally agreed to accept.