What does the term capitation imply in healthcare?

The term capitation in healthcare refers to a payment model where a physician or healthcare provider is paid a set fee per patient, regardless of the number of services rendered or the level of care provided. This fixed payment is typically made on a monthly basis and covers a defined set of services, promoting preventive care and encouraging efficient use of healthcare resources.

Under capitation, providers are incentivized to maintain the health of their enrolled patients proactively, as their revenue does not fluctuate based on the volume of services delivered. This model can help control costs and potentially improve patient care by focusing on overall population health rather than fee-for-service models, which can lead to unnecessary or excessive care.

In contrast, payment based on services rendered would relate to a fee-for-service model, which is distinctly different from capitation. Similarly, a payment system based on insurance coverage and payment only for emergency services do not accurately reflect the principles of capitation, as they imply different motivations and mechanisms in healthcare reimbursement.