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Scheme Capitates Specialist But Not Primary Doctor

Sutter Health, an integrated health system of 26 hospitals and 5,000 physicians in California, is using capitation to encourage greater cost-effective care. But it's not Sutter's primary care physicians who are being capitated.

When Sutter finishes work with its medical groups on a new payment scheme, primary care physicians will be paid on a fee-for-service basis, and specialists will be capitated. The idea is to cut the cost of specialist care while encouraging primary care physicians to provide more treatment without a referral. It has taken Sutter two years to put the plan together and win approval from its affiliated physicians.

The deal would seem to speak to a physician complaint noted in a New England Journal of Medicine article in November. Doctors lamented that financial incentives for speeding up office visits and limiting referrals compromise care, but said incentives based on patient satisfaction improve quality.

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