An Information System Model for Negotiating Capitation Contracts. (Surfing the Information Technology Wave)‪.‬

THE GROWTH OF MANAGED CARE HAS PROFOUNDLY changed the environment in which health care organizations deliver care. While hospitals have adapted to managed care by accepting discounted fees, many health plans increasingly seek to shift more financial risk to providers by using capitation-based provider payments. Under capitation, hospitals and physicians receive a fixed, per capita monthly payment in exchange for agreeing to provide a specified set of services. It Is critical to understand what services are included In the capitation payment, what (if anything) can be billed separately, and what is not covered as a benefit. Providers are increasingly influenced by capitation-based payment systems. Understanding whether a capitation contract will allow a hospital to remain financially viable while providing quality care requires estimating the number of patients to be served, the amount and types of services to be offered, and the cost to provide them. The negotiator must consider many issues when bidding on such a capitation contract, including patient characteristics (demographics and lifestyles), costs, and potential revenues.