Balance of payments; groups moving from fee for service to capitation must find the right incentives for productivity, satisfaction

Physicians are switching from a fee-for-service compensation schedule to a capitation reimbursement plan as more join group practices. Fee-for-service plans are based on work done and the number of patient visits. These plans emphasize productivity. Capitation plans are focused on efficiency. Physicians are given a salary and either a group bonus or profit sharing option to encourage productivity.
In today's managed care markets, group practices must achieve and sustain a growing base of marketable, efficient providers. Physician compensation and work effort systems are critical to accomplishing this goal. [...]