Capitation and Risk Adjustment in Health Care Financing: An International Progress Report

Abstract

In every system of health care, capitation payments have become the accepted tool used by health care purchasers in much of the developed world to determine prospective budgets. The policy prescription of capitation is perceived to address both equity objectives (of great importance in publicly funded systems of health care) and efficiency objectives (the dominant concern in competitive insurance markets). An examination of the current state of the art in 20 countries outside the United States in which health care capitation has been implemented confirms that capitation has assumed central importance within diverse systems of health care. In practice, however, the setting of capitation payments has been heavily constrained to date by poor data availability and unsatisfactory analytic methodology.

A Flourishing Practice?

“…The most efficient healthcare systems in promoting health (in so far as this can be measured) tend to be those where financial systems like capitation payments 61 and gatekeeper systems 62 discourage unnecessary health care. But as the twentieth century drew to a close it became clear that this alone was not keeping costs under control.…”

Reducing avoidable inequalities in health: a new criterion for setting health care capitation payments

“…To this end, many nations have increasingly turned to the use of 'capitations' as a basis for guiding the distribution of health care expenditure [1]. A capitation payment can be defined as the amount of health service funds associated with a citizen for a particular time period.…”

Congestion analysis to evaluate the efficiency and appropriateness of hospitals in Sicily

“…Conversely, the most congested CT and PA are metropolitan areas. As shown elsewhere, a substantial share of demand of health care services, including inappropriate, is induced by its supply or by territorial contiguity, especially in metropolitan areas [33,34].…”