Family practitioners who derived more than half their income from capitation had higher revenues than those who depended less on this form of payment, but for primary care in general, the differences were small. Primary-care practices are hurting, with bankruptcies by the week, but California's problems today won't necessarily be everyone else's tomorrow. An analysis of HMO payment systems reveals remarkable uniformity, regardless of market size. Capitation is HMOs' favored method of reimbursement for primary care physicians, while discounted fee for service is the primary order of business for HMOs when contracting with specialists. The ability of a physician or medical group to determine an affordable fee payment level is a cornerstone of effective managed care contract negotiation.
Experts differ on that one.
But they agree that capitation, in its various forms, is here to stay. Capitation rates are falling, but physicians are nonetheless profiting under capitation. When Harris Health System began posting losses, it became apparent that a new compensation system, with incentives to providers to control costs, was in order. Risk sharing was the answer. On the theory that capitating primary care can lead to unnecessary referrals, a group of California physicians has decided to pay fees to primary care and to capitate specialists.