CA proposal would scrap fee-for-service payment for MDs

So, what if the entire state of California eliminated fee-for-service payments to physicians and replaced them with carefully-regulated capitated contracts? That's something the California HealthCare Foundation (CHCF) would like to find out.

Right now, the group notes, most Californians get their healthcare from physician groups that receive capitated payments for patients. CHCF contends that this widely-implemented capitation model offers lessons which should inform the national reform debate. After all, it notes, capitation (known as the "delegated model") relies on principles already emerging in health reform talks, including bundled payment, accountable care organizations and use of the medical home.

California's experience suggests that for capitation to serve as a national model, physicians will need to create or become employed by formal groups before they take on such contracts.  Another lesson has been that to make sure the groups don't limit appropriate care or overspend themselves into bankruptcy, groups will need to be monitored closely by regulator agencies.

To learn more about this research:
- read this Healthcare Finance News piece
- read this CHCF issue brief

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