Quality of Health Care

APITATION and decapitation have nothing to do with each other, but you could hardly tell the difference when observing the intense debate over the value and risks of capitation in health care payment. Those who favor capitation seem to regard it as the sine qua non of effective containment of health care costs; those who oppose it suggest that it will spell nothing less than the end of medicine’s commitment to patient advocacy and the Hippocratic oath. Meanwhile, health care coverage for more and more Americans is paid for in this way. Between 1987 and 1995, for example, the number of Medicare beneficiaries whose health care was paid for by capitation (under so-called risk contracts) almost tripled.1,2 What has been and will be the effect of capitated payment on the quality of care? In this article, I will review the existing evidence and theories bearing on the relation of capitation to quality and will suggest some ways to ensure that the effect of capitation on the quality of care is a positive one.