How does "capitated reimbursement" affect healthcare delivery?

Capitated reimbursement is a payment model in which healthcare providers receive a set amount of money per patient regardless of how many services are provided within a specified timeframe. This payment structure strongly incentivizes providers to focus on preventive care and maintaining the overall health of their patients. By prioritizing health and wellness, providers can manage costs effectively and avoid unnecessary services that may arise from treating medical conditions that could have been prevented or mitigated through proper care and management.

In this model, the financial risk is borne by the provider, motivating them to engage in practices that enhance patient care and prevent illness. For example, providers are encouraged to invest in health education, regular screenings, and chronic disease management programs to reduce the need for more costly interventions later on. This emphasis on keeping patients healthy aligns the interests of both patients and providers, facilitating a more sustainable approach to healthcare delivery that ultimately benefits the healthcare system as a whole.