What is Capitation?
Category: Healthcare
1Definition
A payment model where healthcare providers receive a fixed amount per patient per period, regardless of services used.
2Context
Incentivizes preventive care since providers profit by keeping patients healthy. Common in HMOs.
3Example
A primary care doctor receives $50/month per patient. If the patient stays healthy, the doctor keeps the full amount.
⚠Common Trap
Capitation doesn't mean doctors are paid poorly—it means they're paid per patient, not per service.
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