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Exposing the true risks of capitation financed healthcare

✍ Scribed by Thomas Cox

Publisher
Wiley (John Wiley & Sons)
Year
2011
Tongue
English
Weight
405 KB
Volume
30
Category
Article
ISSN
1074-4797

No coin nor oath required. For personal study only.

✦ Synopsis

Abstract

Many healthcare finance mechanisms involve transferring uncertain costs to healthcare providers in lieu of fixed payments or global capitation. Global capitation violates basic principles of risk management through insurance. Risk‐theoretic analysis of capitation shows that risk disaggregation forces efficient providers to become inefficient insurers. Risk‐assuming providers face lower profitability and increased exposure to operating losses, and must reduce patient benefits. Global capitation causes inefficiency, increases healthcare costs, and threatens patient‐provider relationships.

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