Under capitation systems, the physician's practice receives the payment whether or not patients receive services in that month. In theory, this type of payment system gives Dr. Jones an incentive to keep all the members healthy. If the members are healthy, they would have less need to obtain health care services and the physician's practice would be able to keep more of the capitation payment. However, some people are afraid that a capitation system encourages physicians to withhold care in order to make money. While some physicians receive capitation payments, other physicians have different payment arrangements.
Some physicians receive a salary for their services.
HMOs sometimes combine these payments with other methods to discourage unnecessary care. Under a typical withholding arrangement, the HMO keeps a certain percentage of the physician's regular payment to cover excess medical costs. Thus, the money a physician receives may depend on how often he or she refers members to specialists, admits members to hospitals or orders expensive tests and procedures. Another similar system is an incentive payment. Incentive payments are in addition to a physician's ordinary payment and are made on the basis of efficiency.