By NextBestFitBlended payment: part capitation, part fee-for-service
A per-patient payment covers basic care and a fee per service rewards doing more for patients who need it.
The primary-care option is blended: per-patient payment for about 70% of expected revenue plus fees for the rest.
Review ledgerHow this path connects
This path
Blended payment: part capitation, part fee-for-service
Concrete changes if chosen
What would actually have to change in law, agencies, payment rules, or systems.
- Blend capitation with fees
Effects
Each effect has its own page: the evidence, the case that it is or isn't a real cost, and whom it affects.
What it fixes
- Paying a fixed amount per patient rewards doing less
Combining per-patient payments for basic care with service fees for additional needed care balances incentives; the approach has been used abroad.
What it creates or worsens
- About $1 trillion a year in administrative cost
Adding service fees to per-patient payments requires more billing.
21 paths soften this
One claims system and standard rulesAbout $1 trillion a year in administrative costChosenStandardize across many payersAbout $1 trillion a year in administrative costChosenSingle public payer for everyoneTens of millions of people have no coverageChosenRegulated multi-payer: everyone must have a non-profit or tightly regulated planTens of millions of people have no coverageRejectedPublic option alongside private insuranceTens of millions of people have no coverageRejectedContinuous eligibility (12-month or multi-year) in Medicaid and CHIPPeople lose coverage when their life changes (churn)ChosenCoverage tied to residence, not job or incomePeople lose coverage when their life changes (churn)ChosenNo cost sharing at the point of careUnderinsurance: covered, but can't afford to use itChosenEvery licensed provider is in-networkNarrow networks and out-of-network surprisesChosenPrevent new debt by ending point-of-care billsMedical debt affects about 100 million peopleChosenEliminate out-of-network statusSurprise billing and a runaway arbitration systemChosenEliminate prior authorization except for a short listPrior authorization delays and blocks careChosenPublic administration with a cost targetInsurer overhead and profitChosenPublic review of hospital budgetsExecutive pay and nonprofit statusChosenCut documentation and billing burdenClinician burnout from paperwork and EHR workChosenGlobal budgets for hospitalsU.S. prices are far higher than in other countriesChosenLower costs for clinicians, not only payProviders leave, retire, or go cash-only if pay dropsChosenFast transition in one or two yearsTransition disruption: jobs, companies, and familiar coverageRejectedAutomatic exemptions and annual collection through taxesCopays keep billing systems alive and still deter poorer patientsChosenDrop point-of-care charges entirelyCopays keep billing systems alive and still deter poorer patientsChosenReport measures publicly without tying pay to themTargets and quality metrics invite gamingRejected - Adds paperwork, coordination, or complexity
Combining per-patient payments and service fees makes payment administration more complex.
Who's affected
Who gains
- People with ongoing or specialist care needs
- Paying a fixed amount per patient rewards doing less: Fixed payments encourage avoiding sick patients or providing less care.
- Health insurers, brokers, and their shareholders
- About $1 trillion a year in administrative cost: Insurers, billing firms, and clearinghouses earn from the complexity.
- Insurance and billing workers
- About $1 trillion a year in administrative cost: Their jobs exist because of the complexity.
Who loses
- Hospitals, clinics, and care organizations
- Paying a fixed amount per patient rewards doing less: They keep the difference when care costs less than fixed payments.
- Health insurers, brokers, and their shareholders
- Paying a fixed amount per patient rewards doing less: They keep the difference when care costs less than fixed payments.
- Doctors, nurses, and other clinicians
- About $1 trillion a year in administrative cost: Time goes to billing and insurer rules instead of patients.
- People with employer coverage
- About $1 trillion a year in administrative cost: Premiums pay for the administration.
- Taxpayers and public budgets
- About $1 trillion a year in administrative cost: Public programs pay for it too.
Where it has been tried
- Denmark GPs: Roughly 20–30% capitation, the rest fee-for-service.
- Ontario family health teams: Blended capitation models.
- Denmark: A 2025 article describes Danish GP remuneration as approximately one-third capitation payments and two-thirds fee-for-service payments.