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January 1997

The Good, the Bad, and the Ugly

Author Affiliations

San Diego, Cali

Arch Otolaryngol Head Neck Surg. 1997;123(1):115. doi:10.1001/archotol.1997.01900010125021

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Living in San Diego, Calif, I have been privileged to be part of the good, the bad, and the ugly of managed care. I have also had the opportunity to assist our department of surgery in developing capitation rates for general and subspecialty surgery. The following are observations that I believe important for those just beginning this process.

Capitation means that a physician or group of physicians agrees to take care of a group of patients for a fixed fee. If the patient group is healthy and requires little medical and surgical care, one can profit. Conversely, if the group is sick, a tremendous amount of work and resources may be required.

Those who recommend a capitation agreement mostly come from business and legal backgrounds. The physician is advised to know the age, sex, and sickness of the group for which he or she is capitating. Except for simple divisions

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