How Does Capitation Affect Care

By December 17, 2009Commentary

When capitation had its heyday in the late 1980s and early 1990s, a major concern was that the payment method would encourage physicians to withhold needed care in order to make more money.  Now capitation-like payment is being advocated as part of reform and an examination of its potential effects on physician behavior toward patients is timely.  A study reported in the Journal of Health Economics looked at the relationship between capitation payment and the amount of time physicians spend with patients.  (Journal Article Abstract)

The researchers calculated that a physician who shaved even a couple of minutes off a visit might add $30-70,000 in annual income.  They then compared length of visit for patients covered by capitation with those who were covered by other payment methods.  The data were physician-reported survey results from National Ambulatory Medical Care Survey.  The results showed that physicians did spend less time on average with capitated patients; and although it was only a little over a minute less, it was statistically significant.

In itself, spending less time with a patient may not be a bad thing.  It may be that being capitated for a patient focuses the physician and he or she simply spends no extraneous time and maximizes efficiency in visiting with the patient.  Patients may be less satisfied but have no worse health outcomes.  Or spending less time may mean it is more likely that a physician misses some important symptom or piece of information that casual conversation might reveal.  This article notes that the research to date may not be conclusive on that score, but so far does not suggest that capitation payment lowers quality of care.  This should give some comfort to promoters of the new bundling, global and episode-based payment systems.  It does not suggest, however, that physicians paid by these means will spend more time really understanding and managing the health of their patients.

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