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Capitation and the Evolving Roles of Providers and Payers in New York

  • By: United Hospital Fund
  • Date: May 2016
  • Priority Area: Advancing Primary Care
  • Type: Resources
  • Category: Report
  • Document: Download

Overview

This United Hospital Fund report, supported by NYSHealth, examines the shifting roles of providers and payers related to the adoption of full-risk capitation. 

Capitation—prepaying provider groups a flat, periodic, per-enrollee fee for all the health care required by a defined population—increases providers’ financial risk, as well as their incentives for providing quality, efficient care. It is considered the step beyond the shared savings and shared-risk contracts under which most accountable care organizations (ACOs) work today. Capitation also represents a major change for provider groups and payers alike, as the health care system moves away from fee-for-service structures and toward value-based payments.

Presenting opportunities and challenges for providers, health plans, consumers, and policymakers, the report also summarizes a number of open issues, including the question of whether enough provider groups will pursue full-risk capitation and be sufficiently successful at it to make a real difference in the health care and health insurance marketplace. The report describes the basics of capitation, illustrating the range of new skills and capacities required by providers to be successful. It lays out the changing roles for ACOs and payers, as well as the options ACOs may consider to acquire needed infrastructure.