Preparing for full-risk capitation.

Full-risk capitation arrangements involve shared financial risk among all participants and place providers at risk not only for their own financial performance, but also for the performance of other providers in the network. Providers that wish to assume full risk must understand the types of risks they need to manage to ensure financial success for all network participants. They also must choose a method of paying network participants. The five principal physician payment models currently used in conjunction with full-risk capitation contracts are fee-for-service, salary, entrepreneurial, subcapitation, and hospital reimbursement. No matter which model is used, measurement and feedback systems should be established to increase the effectiveness of the payment systems. Such measurement and feedback systems should facilitate risk management, cost management, process management, revenue distribution, and contract renegotiation and follow-up monitoring.