dr. solomon's dilemma

financial incentives

statistics and trends on risk-taking by doctors

solomon profile
financial incentives
cost v. care

· Half the primary care doctors in the US are at some financial risk for the care they give.

· The top five states for doctors involved in risk-based contracts are: California, Arizona, Minnesota, Florida and Massachusetts.

· Though most medium-to large-size metropolitan area in the U.S. will have doctors who are capitated in risk-based contracts, rural areas, where there are fewer patients to form risk pools, often have doctors still being paid on a per-procedure basis (known as fee-for-service).

· In California, the state where risk-based, capitated contracts have the longest history, doctors receive monthly fees ranging between $35-$50 for each patient they see who is covered by a commercial plan. They must manage the total care of that patient for that amount. If a patient needs extensive care, that patient becomes a money-loser for the physician's practice.

· According to PriceWaterhouseCoopers, 10 percent of the medical groups in California are operating under Chapter 11 protection, while one-third of the medical groups are at or near bankruptcy. The cause: Doctors are not able to cover the operating costs of their practices based on the reimbursement rates of these risk arrangements.

· The number of patients doctors have in capitated, risk-bearing contracts varies from practice to practice. However, when as little as 25 percent of a doctor's patient pool is capitated, that provider will generally treat all patients as capitated, meaning he or she will become cost-conscious indiscriminate of the fact that many are covered by traditional indemnity health plans.


Peter Boland
author of The Capitation Sourcebook.
Boland Health Care
1551 Solano Ave.
Second Floor
Berkeley, CA 94707

Albert Lowey-Ball
President of ALBA Inc., a Sacramento-based health care management consultant company.

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