This paper aims to evaluate the relationship between capitation payment methodology and the physician organization cost function. The paper provides evidence supporting a positive relationship between overhead rates and the level of capitation. Based on sample data, US medical practices whose net medical revenue consists of 11 percent or more capitation payments have significantly higher overhead costs per physician FTE.
Gartland, M.P. and Carroll, C.A. (2004), "The impact of capitation on physician organizations' cost structures: An exploratory analysis", Journal of Health Organization and Management, Vol. 18 No. 5, pp. 349-360. https://doi.org/10.1108/14777260410560802
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