Reference Work Entry

Encyclopedia of Public Health

pp 1092-1093

Per Capita Payment


Capitation payment


Per capita payment is a payment method by which physicians are paid per patient treated. This payment method aims to assure time efficient treatment of each patient and creates incentives for physicians to treat as many patients as possible. This payment method contrasts with the fee-for-service payment where payment depends on the number of services provided. As payment systems of physicians are seen as mechanisms to achieve policy objectives, such as controlling health care cost or improving health care quality, the per capita payment seems to save more health care costs than the fee-for-service payment method. But still little is known on the impact of different methods of payment (per capita, salary, fee-for-service) on the clinical behavior of the physicians.

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