Capitation vs. FFS payment

Capitation means payment per head or payment per each head attended in a healthcare facility. This form of payment is a monthly payment where the physician is paid per the number of patients attended after each month. Bedenheimer & Grumbach (2008) argue that the main benefits of this system are that it transfers the cost of healthcare from insurers to the providers of such healthcare. A patient requiring an expensive form of treatment will be required to pay more in respect to their health plan compared to their insurance premiums. Forland et al (2000) further argues that capitation provides an increased number of patients with diagnostic and curative services. The other benefit of capitation is cost reduction in health care provision tot eh provider. However, caption has several drawbacks on its side. Forland et al (2000) argue that capitation tends to lower the quality of healthcare provided. Capitation in addition tends to increase the workload for physician, leading to reduced consultation time between the patient and the physician.

In free for service payment method, the physician is paid for each item of service provided and after the care has been adequately provided Glazier et al (2009) argues that free for service method tends to deliver more service to patients. However, this system does not encourage provision of special care. Free for service may also result in over treatment of the patients; this might be detrimental as well (Forland et al, 2000). The main advantage of free for service method is that it makes healthcare available to the poor compared to capitation where one has to pay as per the level of care provided (Bedenheimer & Grumbach, 2008).

Comparing the two payment methods, fee for service might be the better option where quality in healthcare is the norm. There is more specialized treatment under FFS method compared to capitation, which favors specialized types of treatment.

Bodenheimer,T. & Grumbach, K.,(2009). Understanding health policy: a clinical approach. CA: McGraw Hill.

Forland, G.T., et al (2000). Capitation, salary, fee-for service and mixed systems o payment: effects on the behavior of primary care physicians (Review). Cochrane Database of Systematic Reviews, 3

Glazier,R.H. et al (2009). Capitation and enhanced fee for service models for primary care reform: a population based evaluation. Canadian Medical Association Journal. 180(11)

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