Health Maintenance Organizations created the capitation method of payment, touted in the 1990s as the wave of the future, which would contain runaway medical costs, writes Lawrence Huntoon, M.D., Ph.D., in the summer issue of the Journal of American Physicians and Surgeons.
TUCSON, Ariz., June 13, 2019 /PRNewswire/ -- Health Maintenance Organizations (HMOs) created the capitation method of payment, touted in the 1990s as the wave of the future, which would contain runaway medical costs, writes Lawrence Huntoon, M.D., Ph.D., in the summer issue of the Journal of American Physicians and Surgeons. Capitation refers to a flat-fee monthly payment per patient (per head) to a primary-care physician to provide all “necessary” medical care.
The harsh rationing of care by HMOs that ensued was brought to the forefront in the award-winning 1997 movie, As Good as It Gets. “It led to Congress considering ways to curb the HMOs’ egregious abuses, and led health-plan lobbyists to engage in damage control,” Dr. Huntoon writes.
Now, what’s old is new again. The Affordable Care Act (ACA or “ObamaCare”) brought forth Accountable Care Organizations (ACOs), which moved medical financing in the direction of population-based payment and capitation. Recently, the Department of Health and Human Services (HHS) introduced a new flat-fee payment method as a means to curb costs in Medicare. Flat monthly per-head payments will be offered to primary-care physicians. Like HMOs in the past, CMS administrator Seema Verma prophesies that this method will result in better outcomes for patients as opposed to the fee-for-service model, which she says creates “perverse incentives to offer more care.” Of course, capitation creates the perverse incentive to offer less care, Dr. Huntoon points out.
As in years past, when promoters of HMOs maligned fee-for-service as “unmanaged care,” promoters of capitation portray capitation as “value-based” as opposed to “volume-based” fee-for-service, Dr. Huntoon writes.
“Population-based care/capitation is a derivative of socialism,” he concludes. “It is a system that places the good of the population as a whole above the good of the individual.” Giving capitation a new name “does not change the fact that socialism fails every time.”
The Journal of American Physicians and Surgeons is published by the Association of American Physicians and Surgeons (AAPS), a national organization representing physicians in all specialties since 1943.
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SOURCE Association of American Physicians and Surgeons (AAPS)
