Capitation arrangements pose an ethical challenge through the risk-sharing model of encouraging economic incentive via reduced utilization of services, to the financial benefit of the physician and the managed health care organization that share the risk. While some applaud the inherent incentive within the capitation risk-sharing system to increase efficiency and reduce over-utilization of resources, others suggest that there exists within a capitation system the insidious incentive to under treat patients and avoid patients with chronic or extreme
