Question

What is capitation in health insurance?

Answer 1

Capitation in health insurance is a type of healthcare payment in which the insurer pays a fixed amount to a doctor or hospital per patient for a particular period of time, whether the patients are treated or not.

Advantage of capitation:-

1. Less records to be maintained by doctor

2. Reduces the chance of costly procedure, as the doctor will get paid a fixed amount , no matter what the procedure or cost involved in the check up .

Disadvantage of capitation:-

1. Doctor will try to make money by enrolling as many patients as possible, because if they don't fall sick he will still receive the money.

2. Doctor will give less time to the patients as it is not a profit making business when every patients uses the benefit of capitation.