Capitation

Capitation started out as a popular method for reimbursing primary care physicians/gatekeepers. Now capitated contracts can be seen in every area of healthcare... ... because of varying volumes, not all specialty care providers should be capitated at the same time. For example, higher volume services (e.g., laboratory, radiology, orthopedics, and cardiology) are usually first to be capitated. Specialists and other medical services that are used infrequently (e.g., neonatologists, neurosurgeons) or "high ticket" specialists (e.g., open heart surgeons) are usually capitated last, if at all. The cost of their services is relatively high and a miscalculation in projected membership or actual utilization can have a large financial impact.