NU Online News Service, Nov. 21, 9:54 a.m. – Capitation is holding its own or growing in many communities, according to a new report from National Health Information, Atlanta.

Capitation is the practice of paying doctors and hospitals a flat fee for each plan member served.

Some health maintenance organizations have moved away from capitation in recent years, in part because problems with analyzing capitation contracts caused severe financial problems in the late 1990s for some hospitals and medical practices. But, today, capitation is doing better than most people realize, National Health says.

Hospitals are collecting 3% more capitation revenue this year than they did last year, and multispecialty physician groups are collecting 9.4% more, the firm says.

Capitation rates per patient served have increased 6% for primary care medical practices and 9.9% for all health care providers, and 90% of the providers surveyed report that they break even or make a profit on capitation business, National Health says.