Addressing the inequity of capitation by variable soft contracts

Amir Shmueli and Jacob Glazer ()

Health Economics, 1999, vol. 8, issue 4, 335-343

Abstract: In the search for greater efficiency and cost‐containment, many health systems have introduced the practice of medical care providers operating under a fixed budget, often referred to as the capitation or fundholding contract. Although the capitation contract seems equitable at first glance, the sequential decision‐making practice of providers—shaped by their rate of present‐preference and their attitude toward the risk of running out of budget—may result in serious violations of basic equity principles. We propose a variable soft (or mixed) payment contract (VSC), where the share of the retrospective payment increases over time, as a way to make the contracts more equitable. We also discuss how the parameters of the capitation contract (length of the budget period, soft or hard contracts, solo vs. consortium practice etc.), which are usually set by efficiency criteria, may have serious implications with regard to the equity of the system. Copyright © 1999 John Wiley & Sons, Ltd.

Date: 1999
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://doi.org/10.1002/(SICI)1099-1050(199906)8:43.0.CO;2-O

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:wly:hlthec:v:8:y:1999:i:4:p:335-343

Access Statistics for this article

Health Economics is currently edited by Alan Maynard, John Hutton and Andrew Jones

More articles in Health Economics from John Wiley & Sons, Ltd.
Bibliographic data for series maintained by Wiley Content Delivery ().