Economics from a Health Care Perspective
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What incentives does a capitates physician have to keep his patients happy? What incentive does an FFS physician have? If Mr. Jones is a cranky old man who smokes and drinks so much that his liver and other organs are going downhill, which payment system provides more incentive to keep Mr. Jones satisfied? Which provides the most incentive to render extra care? Which provides the most incentive to make sure that the level of care is optimized?"
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The solution discusses economics from a health care perspective.
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In a capitation system, a physician is motivated to keep patients satisfied so they do not exit the program. He is paid a fixed amount for each patient assigned to him, so he wants them to remain his patients, but not to demand so much treatment that he cannot cover his expenses. A FFS physician, on the other hand, wants the patient to see him as much as possible. He is ...
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