Doctor Payment “Capitation” — And What It Means For You

by | Jul 3, 2012

Now, thanks to our President, Congress and even Supreme Court—who was supposed to protect us—we’re about to turn over the practice of medical care to the least capable, and least morally qualified, to handle anything.

In all the fuss over Obamacare, we hear about patients, insurance companies and businesses. All valid, to be sure. But we never hear word one about the people most affected of all by socialized medicine: Doctors.

Ayn Rand said it best in her novel Atlas Shrugged:

“I observed that in all the discussions that preceded the enslavement of medicine, men discussed everything—except the desires of the doctors.”

Men considered only the ‘welfare’ of the patients, with no thought for those who were to provide it. That a doctor should have any right, desire or choice in the matter, was regarded as irrelevant selfishness; his is not to choose, they said, but ‘to serve.’”

Payment methods for doctors will dramatically change, starting in about two years. This is important. More people will be on government insurance than ever before. Most if not all physician payments will come from the government.

You might think, “This doesn’t matter to me. I don’t care how my doctors are paid.” But your doctors are paid for by the government, who gets to determine how YOUR care is delivered. It’s not just about payment; it’s about control.

As it is, a lot of people object to the intervention of private insurers into medical treatment of patients. For a long time, HMOs were all the rage. Bean counters who worked for private insurance companies told doctors when it was, or wasn’t, appropriate to provide certain medical services.

People were understandably upset. Who wants an insurance company employee with a bachelor’s degree in sociology to decide whether or not you need a mammogram, surgery, or any kind of medical test or procedure?

Eventually, private insurance companies backed away from HMOs and “managed care.” They had to, in order to please enough customers to stay in business.

The government will have no such problem. Government will be the primary provider of insurance. If your doctor thinks you need a medical procedure, and the federal government says no—then that’s the end of it.

Sure, you can probably appeal, but through the government that will take years.

You will have no choice because your doctor is being paid for, and now essentially works for, the government. Your doctor will have no choice, either.

The “Patient Affordable Care Act,” popularly known as Obamacare, states that starting in 2015 physicians’ payments from federally funded programs such as Medicare will be modified to be based on the quality of care, not the volume.

What does this mean, exactly? We don’t yet know, for sure. Most likely this means what’s called “capitation.” Capitation refers to paying health care providers a set amount, each month or year, for all medical care provided. In other words, doctors will no longer bill fee-for-service for each patient and procedure done. Instead, doctors will be given a flat, lump sum – essentially a salary, each year, paid for by the government. The government will tell doctors, “Treat everyone we send you, based on what we consider medically necessary.”

Imagine any other professional or business being paid this way. Imagine grocery stores being paid a lump sum by the government to provide food—based on what the government considered appropriate food for citizens to eat. What kind of incentive would grocery stores have to please customers? None. What kind of variety and diversity would you see on grocery store shelves? About as much as they found in Soviet Russia, or today in North Korea or Cuba.

Americans are not ready for Communism applied to medical care.

The tragic thing about socialized medicine is that it came to America by default. Most are not paying attention. Those who do are thinking, “I really don’t understand what this is about. We’ll just have to wait and see.” That’s why there’s no outrage in the streets over any of it. The government is placing this cloak of death and despair over us so gradually that we’ll supposedly never know what hit us.

It’s amazing. Can you imagine capitation being imposed on other professional fields—such as lawyers? Lawyers make a lot of money. Nobody is calling them “greedy, rich and selfish” and demanding that the government take over the payment of lawyers and the provision of legal services. I’m not suggesting such a thing should happen. I’m just pointing out the incredible double standard. It’s probably no accident.

Most politicians are lawyers, not doctors.

Doctors and lawyers are two of the most esteemed and well-paid professionals in our society. And with good reason. Yet lawyers remain part of the private, for-profit sector. Doctors, on the other hand, are being handed over almost entirely to the public sector. Why the discrepancy?

When HMOs started to move towards capitation back in the 1990s, there were howls and cries from health professionals. I’m a practicing mental health professional, so I know. The for-profit HMOs eventually backed down, because they needed to keep satisfied providers and policyholders.

Government is a monopoly. Under socialized medicine, it will face less competition than ever before; almost no competition. There’s nothing to force government to please its customers. We already know that government cannot run a postal system, an air traffic control system, and can only go through the motions of operating a public school system.

Government can barely even run a war. Everything government touches becomes worse under its control. And the government is completely in the red for attempting it.

Now, thanks to our President, Congress and even Supreme Court—who was supposed to protect us—we’re about to turn over the practice of medical care to the least capable, and least morally qualified, to handle anything.

Dr. Michael Hurd is a psychotherapist, columnist and author of "Bad Therapy, Good Therapy (And How to Tell the Difference)" and "Grow Up America!" Visit his website at:

The views expressed above represent those of the author and do not necessarily represent the views of the editors and publishers of Capitalism Magazine. Capitalism Magazine sometimes publishes articles we disagree with because we think the article provides information, or a contrasting point of view, that may be of value to our readers.

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