David Himmelstein, MD, and Steffie Woolhandler, MD, are primary care physicians based in New York and authors of the article. They said fee-for-service has led to perverse incentives for a long time, but “capitation risks making things even worse.”
For example, in the 1970s and 1980s, policymakers championed the use of health maintenance organizations, better known as HMOs, as an alternative to fee-for-service or universal healthcare. HMOs paid providers a fixed fee and increased financial risk-sharing among patients, providers and others in the delivery system. However, HMOs fell out of favor because they limited patient choice and forced some physicians to deny some care, especially for those with unprofitable illnesses, the authors wrote.
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