What does the capitation payment model entail?

The capitation payment model is a healthcare payment structure where providers receive a fixed amount of money per patient for a specified period, regardless of the number of services rendered. This model emphasizes the management of patient care by incentivizing providers to focus on preventative care and overall patient wellness rather than the quantity of services delivered.

In this arrangement, providers are typically responsible for all the healthcare services a patient may need within that time frame, which encourages efficiency and cost-effectiveness. By effectively managing resources and promoting preventive measures, the capitation model can lead to better health outcomes while potentially lowering overall healthcare costs.

Understanding this model is crucial for recognizing its implications on healthcare delivery and financial management in healthcare organizations. The fixed payment structure contrasts sharply with other models, such as fee-for-service, where providers are compensated based on the volume of services delivered.