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How does the capitation model of reimbursement work? Do physicians generally prefer one model over the...

How does the capitation model of reimbursement work? Do physicians generally prefer one model over the other? Why or why not? Why do HMOs prefer the prepaid, monthly premium?

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Answer #1

How does the capitation model of reimbursement work? Do physicians generally prefer one model over the other? Why or why not?

The model is a preventive health care plan where we give a direct payment to the primary care physician for those members enrolled in the program and have selected the physician as their provide. Physicians are believed to prefer a fee for service model of reimbursement because it reflects their autonomy as professionals in that sector.

Why do HMOs prefer the prepaid, monthly premium?

The advance monthly premium makes services available easily especially in clinic settings and encourages one to come in soon to prevent a minor condition from it escalating.

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