What does capitation in healthcare reimbursement incentivize?

Capitation in healthcare reimbursement incentivizes efficiency in patient care by providing healthcare providers with a fixed amount of payment per patient, per unit of time, regardless of the number of services provided. This payment structure encourages providers to deliver necessary care while also managing resources effectively to avoid over-utilization of services.

Since the providers receive the same payment irrespective of the volume of services rendered, they are motivated to focus on preventive care and manage patient health efficiently. This model discourages unnecessary tests and procedures that do not contribute to the patient's health, promoting a more value-based approach to healthcare rather than a volume-based one. By doing so, it helps contain costs while striving to maintain or improve the quality of care provided to patients.

Other choices focus on aspects such as increasing visits or delivering high volumes of services, which are not aligned with the intent of capitation, as this model is designed to foster a reasonable approach to care that prioritizes the patient's health outcomes over the quantity of services delivered.