A model of capitation.
This paper presents a theoretical model of capitation contracts. The consumer's ex ante choice of medical plan is derived under flexible assumptions about provider-patient decision-making. The optimal medical plan is shown to combine full insurance with a provider payment system that is a mixture of capitation and partial reimbursement of provider costs. This solution strongly parallels the 'mixed payment' system derived by Ellis and McGuire (1986, 1990) in the context of prospective payment, though the optimal medical plan derived below may in fact be preferred to that solution in a world with endogenous admissions.
Selden
T M
TM
Syracuse University, NY 13244.
D002204:Capitation Fee / Q000706:statistics & numerical data*; D003256:Community Participation / Q000191:economics*; D003361:Cost Allocation / Q000706:statistics & numerical data; D003657:Decision Making; D003669:Deductibles and Coinsurance; D007348:Insurance, Health / Q000458:organization & administration*; D008329:Managed Care Programs / Q000191:economics*; D015233:Models, Statistical; D011445:Prospective Payment System; D012051:Reimbursement Mechanisms; D012306:Risk; D014481:United States