In terms of healthcare reimbursement, what does the term "capitation" imply?

The term "capitation" in healthcare reimbursement refers to a payment model where a healthcare provider receives a fixed amount of money per patient for a specific period, typically a month or a year, regardless of the number of services used or the frequency of patient visits. This model promotes efficiency and cost management, as the provider is incentivized to focus on preventive care and manage the patient's overall health rather than simply performing more procedures or visits.

In a capitation model, providers benefit from efficiently managing patient care, as they receive the same payment regardless of the patients' healthcare needs. This approach contrasts sharply with models based on volume, such as fee-for-service, where providers are paid based on the number of services delivered or procedures performed. The fixed payment structure of capitation encourages providers to prioritize quality over quantity, aiming to keep patients healthy and reduce unnecessary treatments.