Assignment: Under Capitated Price

Assignment: Under Capitated Price


Assignment: Under Capitated Price

Healthcare organizations using this system receive reimbursement from the third-party payer based on the diagnosis of the patient. The per diagnosis rate provides financial risks and financial incentives for the healthcare organization. The better the organization controls costs, the more profit it makes. However, there is no way an organization can “pad the bill” the way it can in a per diem system (by extending the length of stay), since the third-party payer is reimbursing by the diagnosis instead of by the day.

Under capitated price, or capitation, healthcare organizations receive a fixed amount of money each month for every person enrolled in the plan, regardless of whether a given person receives care. Capitation as a payment method provides the greatest financial risk and opportunity to the healthcare organization because the fixed amount is based on the cost of care projected to be used by the covered population, rather than the cost of care actually used. If the costs to care for the covered population fall below the capitated price, the healthcare organization makes money. If the costs exceed the capitated price, the orga- nization does not profit.

The other payment methods mentioned previously provide financial incentives to healthcare organizations to contain costs after the patient seeks care, primarily by controlling use, but capitation also provides financial incentives to healthcare organizations to contain costs before the patient seeks care, primarily by encouraging prevention. Third-party payers and healthcare organizations negotiate capitated payments, often called premiums, based on their perceptions of the actuarial experience of the covered population. Whether the healthcare organization realizes a profit or incurs a loss depends on its ability to project demand for care by the covered population and negotiate the appropriate capitation, and then to contain costs when a member of the enrolled population—a subscriber—seeks care.

You must proofread your paper. But do not strictly rely on your computer’s spell-checker and grammar-checker; failure to do so indicates a lack of effort on your part and you can expect your grade to suffer accordingly. Papers with numerous misspelled words and grammatical mistakes will be penalized. Read over your paper – in silence and then aloud – before handing it in and make corrections as necessary. Often it is advantageous to have a friend proofread your paper for obvious errors. Handwritten corrections are preferable to uncorrected mistakes.

Use a standard 10 to 12 point (10 to 12 characters per inch) typeface. Smaller or compressed type and papers with small margins or single-spacing are hard to read. It is better to let your essay run over the recommended number of pages than to try to compress it into fewer pages.

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The paper must be neatly formatted, double-spaced with a one-inch margin on the top, bottom, and sides of each page. When submitting hard copy, be sure to use white paper and print out using dark ink. If it is hard to read your essay, it will also be hard to follow your argument.