A physician may face conflicts of interest in a capitated health plan if compensation is based on certain factors.


Conflicts of interest may occur because of:

(1) economic profit (greed)

(2) need to avoid catastrophic economic loss (fear)

(3) stress associated with loss of control (manipulation)


A physician may face conflict of interest if:

(1) too much income is at risk

(2) there is no provision for per-patient stop-loss insurance

(3) risk is assumed for services over which the physician has no control

(4) risk is assumed by the individual physician (rather than distributed over a larger group)

(5) the pool of enrollees is small

(6) incentives are narrowly targeted to reduce certain services

(7) incentives to reduce services do not monitor for underutilization

(8) decisions to reduce services are not evidence-based

(9) incentives do not take into consideration patient outcome, satisfaction or other quality measures

(10) there is no risk adjustment to capitation rates

(11) bonuses and withholds determined frequently and distributed as a lump sum


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