Capitation
Capitation is a payment arrangement in health care in which a provider or group is paid a fixed amount per enrolled patient over a defined period, typically per member per month (PMPM), regardless of how many or which services the patient uses. This model is common in managed care, integrated delivery systems, and some national health programs, and it shifts financial risk from payers to providers.
Capitation payments are often adjusted for patient risk and complexity via risk adjustment factors, age, gender,
Advantages include predictable budgeting, incentives for preventive care and care coordination, and potential efficiency gains. Disadvantages
Historically, capitation has been used in HMOs and public primary care funding. It emerged in the late