Dive Brief:
- A new article in the Journal of Internal Medicine suggests that new care initiatives such as accountable care organizations, bundled payment, and risk-sharing contracts may only be repeating the mistakes made in the past with capitated arrangements.
- Authors David Himmelstein, MD, and Steffie Woolhandler, MD, both primary care physicians based in New York, argue that while fee-for-service is creates perverse incentives, capitation could make things even worse.
- The authors suggest that it accountable care structures could bring back some of the worst results of capitation, including upcoding of diagnoses to receive higher fixed payments. Instead of putting more financial pressure on doctors, new models should focus on holding down costs and minimizing "the opportunities for profit and the risk of loss."
Dive Insight:
I believe the authors of this journal piece are absolutely right when it comes to bringing back capitation -- that it caused more harm than good and should stay in the dustbin of history. And call them what you will, but these new payment schemes are indeed capitation by any reasonable standard. Yes, scaling up to taking financial risk will work well for some large practices which have the capital to deal with capitation up and downs, but in other cases it will unfairly punish physicians and hospitals who are hit with a flood of adverse cases. Forcing providers to function like an insurance company really doesn't make sense.