Would Albert Einstein favor capitation or fee-for-service payment? Ninety-three years ago this November, Einstein was awarded the Nobel Prize in physics for tackling a surprisingly similar question.
Albert Einstein did not win the Nobel Prize in physics in 1921 for his famous theory of relativity. Instead, he won for deriving a theory to explain another very important physics question: Is light a wave or a particle?
Einstein’s Nobel Prize-winning theory proposed that light is a wave, and it has particle-like qualities. His comments on the problem could have been meant for fee-for-service (FFS) and capitation:
It seems as though we must use sometimes the one theory and sometimes the other, while at times we may use either. We are faced with a new kind of difficulty. We have two contradictory pictures of reality; separately neither of them fully explains the phenomena […], but together they do.
Many times we find ourselves captive to the tyranny of “or”. Do we invest in Project A or Project B? Do we advertise with Channel 4 or Channel 10? Do we hire Sally or Susan? Should we use FFS or capitated payments?
In the spirit of Einstein’s duality theory, HCTadvisor is witnessing several dual reimbursement models emerge. Aside from ACOs that use FFS models with bonuses tied to capitated benchmarks, we’ve also seen strange new models within ACO organizations that blend FFS and capitation with a 50/50 split. In 2014, we also saw surgeons being paid per member per month compensation for post-discharge care coordination services by hospitals that are trying to prevent readmissions. Additionally, in 2015 Medicare is augmenting primary care physicians’ FFS payments with flat $40 per member per month compensation for care coordination for chronic disease patients.
Payors, physician organizations, and ACO operators are all experimenting to try to find a dual payment model that works just right.
By comparison, the particle-wave duality physics debate is still raging among physicists 93 years after Einstein’s Nobel Prize award. We don’t expect a definitive answer to the capitation vs. FFS debate to emerge anytime soon.