Capitation “ReDux” – Part Two

Join Our Mailing List

Global Physician “Capitation” Payments Making a Comeback

[By Staff Reporters]

biz-bookDid you know that Blue Cross and Blue Shield of Massachusetts is making a major change in the way it pays its physicians?

It’s moving from [discounted] fee-for-service pay to per-patient per-year capitation rates, adjusted for age and sickness (severity adjustments), plus a bonus for those MDs who improve patient health status. No definition of this term was given; however. 

Under the new “incentive” plan, BCBS hopes to transfer risk to primary medical care groups.

Typically, the capitation will cover all primary care, specialist, counselor and hospital costs. Interestingly, BCBS has publicly denied that this system is “capitation”, and assured the public that it has safeguards in place to make sure patients won’t be under-treated and doctors won’t be underpaid.

Yet, BCBS of Mass hopes to cut the growth in medical costs in half in two to four years among providers who accept this cloaked global capitation-redux.


Talk about jargon obfuscation – what do you think?

PART ONE: The Re-Emergence of Medical Capitation?


Your thoughts and comments on this ME-P are appreciated. Feel free to review our top-left column, and top-right sidebar materials, links, URLs and related websites, too. Then, subscribe to the ME-P. It is fast, free and secure.


Speaker: If you need a moderator or speaker for an upcoming event, Dr. David E. Marcinko; MBA – Publisher-in-Chief of the Medical Executive-Post – is available for seminar or speaking engagements. Contact:


FINANCE: Financial Planning for Physicians and Advisors
INSURANCE: Risk Management and Insurance Strategies for Physicians and Advisors

Product DetailsProduct Details

5 Responses

  1. FYI:

    For another interesting perspective, take a look at this link:

    Microcapitation: A Closer Look and New Perspective on Capitation

    Hope Hetico


  2. Is This A Fair Way To Pay Docs?

    The Affordable Care Act, ACOs, and the inflationary effects of fee-for-service payments have led to a resurgence in the use of capitated payment methodologies. Providers should have a good understanding of what capitation is, and what risks are inherent.

    A capitated agreement is essentially a risk management agreement. Just as a gambler would contemplate the risks inherent with each wager, the physician, too, should engage in a similar decision making process when determining whether to participate with a capitated plan.



  3. Population Health and Capitation Terms

    So, are population-based payment models … the latest name for full-risk (global) capitation models?



  4. Median Health Plan Costs by Functional Area (PMPM)

    The following 2013 are median Independent/Provider-Sponsored health plan costs per member per month (PMPM) according to Sherlock Company:

    * Sales and Marketing – $10.80
    * Provider and Medical Management – $6.38
    * Account and Membership Administration – $15.29
    * Corporate Services – $6.16
    * Total Expenses – $38.59
    * 2013 Data-Per Member Per Month

    Source: Sherlock Company


  5. Health Care Cost Insights and Capitation for the Patient Centered Medical Home (PCMH)

    The Population Health Blog finally caught up with the October 22/2914 “Price, Cost and Competition” issue of JAMA.

    Ann Miller RN MHA


Leave a Reply

Please log in using one of these methods to post your comment: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: