Capitation Model

A capitation model is a payment system used in healthcare where a provider, such as a doctor or clinic, receives a set amount of money per patient assigned to them, regardless of how many services that patient uses. This means the provider is paid a fixed fee each period to manage and care for the patient population, encouraging preventive care and efficiency. It shifts some financial risk to the provider but also incentivizes maintaining patient health to avoid costly treatments. Essentially, it's a way to bundle payments to promote coordinated, cost-effective healthcare management.