What distinguishes capitation from other reimbursement systems?

Capitation is uniquely characterized by the fundamentally different payment structure it employs compared to other reimbursement systems. In a capitation model, providers receive a fixed, predetermined payment for each enrolled individual, typically on a monthly basis. This payment is made regardless of the number or type of services that the individual receives during that period. This approach incentivizes providers to offer comprehensive and preventive care, as they are responsible for managing the overall health of their patient population without the pressure of being reimbursed per treatment or procedure.

The structure contrasts sharply with other reimbursement models, such as fee-for-service, where providers are compensated based on each individual service or treatment provided. In capitation, the focus shifts from a transactional service approach to a more holistic patient management concept. This encourages cost-efficient care while aiming to improve health outcomes, which is a fundamental goal of many healthcare organizations seeking to promote high-quality care.