Capitated Pricing

What is Capitated Pricing?

Capitated pricing is a payment model in which a healthcare provider receives a fixed amount per enrolled member per period, regardless of the volume of services delivered. In employer-sponsored health plans, capitation shifts financial risk from the payer to the provider, incentivising preventive care and efficient resource use. HR professionals encounter capitated pricing when evaluating managed care options such as HMOs. Understanding this model helps benefits administrators assess the trade-offs between cost predictability and potential limitations on provider choice for employees.