Constantly increasing cost of health care expenditures is growing concern for the health care system in the United States. Increasing share of the health care expenditures from 13.1 percent of GDP in 2000 to 17.5 percent of GDP in 2014 has outpaced the other sectors of the nation’s economy (Centers for Medicare and Medicare Services, 2014). In 2014, nation’s health care expenditures grew to $ 3 trillion an increase of 5.4 percent from 2013 (National health expenditure, 2014). According to Organization for Economic Co-operation and Development (2103), the government sponsored nation’s public health insurance program Medicare and Medicaid constitutes about 48 percent of national health care expenditures. It covers about 30 percent of the population
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Capitations provide incentive to minimize service utilization. Health care providers deliver only services that are essential in low cost setting, thereby avoiding overtreatment and over utilization of services. According to the Journal American Board of Family Medicine (JABFA, 2013), under capitation model focus is more on preventive measure as a cost-reduction strategy. Patients are educated and given detailed information about management of chronic conditions before they become acute and severe requiring emergency room visit, self-care, health awareness, and promoting healthier life style. Benefits of patient education include improved patient physician relationship, more realistic approach to outcome of the illness, patient involvement in decision-making process, and patient preferred choices. Capitation model establishes a patient centered, coordinated, and community based care with more emphasis on preventive care. “Health plans participating in Medicare and Medicaid capitated model will have incentives to modify contracting and coordinating efforts with the facilities to reduce patient admission from the facilities” (Brandal and Cook, 2013). Medicare and Medicaid managed care program with a capitation model of reimbursement delay an enrollee’s nursing home admission by increasing use of home and community waiver services, discouraging unnecessary inpatient hospital admissions (Brandal and Cook,
Capitations provide incentive to minimize service utilization. Health care providers deliver only services that are essential in low cost setting, thereby avoiding overtreatment and over utilization of services. According to the Journal American Board of Family Medicine (JABFA, 2013), under capitation model focus is more on preventive measure as a cost-reduction strategy. Patients are educated and given detailed information about management of chronic conditions before they become acute and severe requiring emergency room visit, self-care, health awareness, and promoting healthier life style. Benefits of patient education include improved patient physician relationship, more realistic approach to outcome of the illness, patient involvement in decision-making process, and patient preferred choices. Capitation model establishes a patient centered, coordinated, and community based care with more emphasis on preventive care. “Health plans participating in Medicare and Medicaid capitated model will have incentives to modify contracting and coordinating efforts with the facilities to reduce patient admission from the facilities” (Brandal and Cook, 2013). Medicare and Medicaid managed care program with a capitation model of reimbursement delay an enrollee’s nursing home admission by increasing use of home and community waiver services, discouraging unnecessary inpatient hospital admissions (Brandal and Cook,