Capitation base resource allocation: does it provide the necessary financial incentives for the MTF to achieve technical and allocative efficiency?
Chavez, Anthony S.
Scaramozzino, James A.
Gates, William R.
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This thesis analyzed the effect capitation based resourcing has on the incentives for the commander of military treatment facilities (MTFs). Specifically, what incentives do MTF Commanders have to increase effectiveness and efficiency in a capitated system? In answering this question, factors such as the ability of the Commander to contract out services and the proper mix of services to maximize the value to patients while maintaining the quality of care within the capitated constraint were discussed. The mechanism for determining the capitated rate and how Bid Price Adjustment and transfer payments affect incentives were reviewed. These characteristics were analyzed to determine whether capitation in BUMED provides the necessary market incentives to achieve technical and allocative efficiency. After comparing the incentives in BUMED to the incentives in civilian sector capitation, it is unclear if BUMED will achieve similar results.
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