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Abstract:
In certain basic ways, capitation seems to be a win-win situation for everyone. A health plan pays providers in carefully structured networks a fixed fee for each enrollee. Providers are prepaid these fees for a certain number of patients in one or more plans in which they participate. Costs are reasonable and predictable for both plans and employers. Although providers assume most of the risk, they have a guaranteed, predictable revenue stream and a ready-made patient base in exchange for this risk.