California is seeing the decline of capitation -- fixed prepayment for care of a defined population -- particularly for commercial health insurance products. This issue brief explores the impact of this trend on the state's medical groups and independent practice associations (IPAs). The main question at hand is whether California's delegated model will remain sustainable with lower levels of commercial capitation.
The analysis is based on both quantitative and qualitative data. The medical group and IPA leaders interviewed for this research made a number of observations, including:
The research points to the importance of continuing to track changes in the payment environment of California's capitated, delegated physician organizations. Although the decline in commercial capitation has been slow enough that it has not yet led to significant changes in operations, it may soon do so.