Do you think a provider’s incentives differ when the provider moves from a fee-for-service to a capitated environment? Why, or why not?
                                             CLASSMATE’S POST
Fee-for-service and capitation offer care in vastly different ways.  In a fee-for-service plan, a fee is generated every time a service is provided.  For each service provided, an additional fee is charged. For a provider, the more services that are provided and the more fees charged, the more money they are going to make as profit is built into each price.  In a capitated environment, patients are charged one flat fee per month and can receive care whenever they need.  Providers no longer focus on how many services they can provide, but on reducing the number of visits that a patient has to their office and the quality of care that their patients receive.  If they can keep their patients healthy and out of their office, the patients will make less visits. The less a patient utilizes the resources of the provider, the more money the provider will make. If a provider moves from a fee-for-service to a capitated environment, their incentives will absolutely change.  They will strive to keep patients healthier, order less unnecessary tests and procedures, and create a stronger patient/provider relationship.

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