An information system model for negotiating capitation contracts.

Capitation contracts require health care organizations to negotiate on a much more sophisticated and risky level. Understanding whether a capitation contract will allow a hospital to remain financially viable while providing quality care requires estimating the number of patients to be served, the amount and types of services to be offered, and the cost to provide them. This article presents an information system model designed to assist a large hospital, not only in determining true patient cost, but also in aggregating the cost information in different ways, such as conducting a case-mix analysis, to perform a more informed quote analysis for capitated contracts.