Challenges, Benefits of Global Capitation Models from a Provider Perspective
Global capitation models require data, a supportive culture, the right structure, and a healthy dose of patience.
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- There are four major challenges that organizations face when they try to implement global capitation model, Michael Weiss, MD, vice president of population health for Children’s Hospital of Orange County (CHOC), explained to Healthcare Strategies.
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First, organizations must have patience and understand that the transition to global capitation is a process.
“It doesn't happen overnight. The 24 years that we've been doing this has been an evolution,” Weiss shared. “We certainly were not very good at it at the beginning and have gotten a lot better, but still have a lot to learn.”
Secondly, data is key both to the success and challenges that organizations face when launching a global capitation model. Estimating capitation is not guesswork. It requires ample historical data and actuarial input on how to reconcile costs and codes.
Third, the care model itself can be challenging. The organization’s specialty or structure will influence their experience of implementing a global capitation model.
“Managed care and especially global capitation is very much suited for pediatrics because we were at the forefront of the patient-centered medical home,” Weiss said.
One way that organizations can get into the model is to partner with their health plans to receive an advanced care coordination fee.
The fourth and final major challenge that organizations face is the culture around payment. Shifting from fee-for-service to capitation will require a mentality shift within practices.
Providers—as well as patients—who are well-informed about how the model works can better leverage the model to produce savings. There will be some patients whose needs demand a cost beyond the capitation model, but there will also be other patients who do not utilize care enough to meet the payment that covers them.
“If you align incentives appropriately, on the back end there is the opportunity to recoup funding that then makes up for any deficits that would occur,” Weiss explained.
He went on to share how healthcare organizations can implement global capitation models to advance value-based care.
