How does capitation affect healthcare providers?

Capitation is a payment model in healthcare where providers receive a fixed amount of money per patient enrolled over a certain period, regardless of the amount of care the patient requires. This model encourages providers to focus on preventative care and managing patient health efficiently, as their income is not directly tied to the number of services or procedures performed. This emphasizes patient outcomes over the volume of services rendered.

By receiving a fixed payment, healthcare providers are incentivized to manage their resources wisely and prioritize effective treatment protocols. This model can lead to improved patient satisfaction and care coordination, as providers are motivated to keep their patients healthy and minimize the need for costly interventions.

While capitation might also lead to fewer services being performed because providers are incentivized to control costs, the core definition and impact of capitation center on the fixed payment system per enrolled patient, which is why this option accurately captures the essence of how capitation functions within the healthcare system.