The Case for Capitation by Brent

In our Fixing Health Care package, we look at the two leading models. In this article, Brent C. James and Gregory P. Poulsen make the case for capitated payment. They say that approach is o rein in health care costs in the United States, we should look to the ideas of W. Edwards Deming, the legendary management guru who showed companies how to cut waste from work processes and lower operating costs by improving quality. Recent studies using Deming’s approach reveal that inadequate, unnecessary, uncoordinated, and inefficient care and suboptimal business processes eat up at least 35%— and maybe over 50%—of the more than $3 trillion that the country spends annually on health care. That suggests more than $1 trillion is being squandered.