What is a key characteristic of a capitated compensation plan?

A key characteristic of a capitated compensation plan is that payment is fixed per patient per period. This model means that healthcare providers receive a set amount of money for each enrolled patient, regardless of the number of services that patient ultimately uses. It facilitates a focus on preventive care and efficient service delivery, as providers are incentivized to maintain the health of their patients within a budgeted amount. This can potentially lead to more coordinated care and better management of resources, as providers are motivated to keep patients healthy and reduce unnecessary services.

In contrast, other compensation methods like fee-for-service pay providers based on the number of services delivered, which can sometimes lead to over-utilization of care. Performance metrics and local market rates further complicate compensation structures by linking payment to specific outcomes or regional price variations, which is not the defining feature of a capitated payment model. Instead, the fixed payment structure inherent in capitation promotes a focus on overall patient care rather than individual service quantity.