HMOs are much more likely to use capitation to pay for physician services than for hospital services (see Exhibit 6.6). In 2001, 58% of HMOs paid primary care physicians and 42% paid specialists using capitation. Fee-for-service is the most common payment method, and its use increased from 1997 to 2001, from 33% to 80% for primary care physicians and from 49% to 85% for specialists.

Notes: Data show the percentage of HMOs using various methods for any portion of physician reimbursement.

Source: InterStudy Publications, The InterStudy Competitive Edge 12.1, Part II: HMO Industry Report, (reporting data as of July 1, 2001), April 2002, Table 22, p. 48 (2001 data). Kaiser Family Foundation, Trends and Indicators in the Changing Health Care Marketplace Chartbook, August 1998, Exhibit 6.5, p. 62 (1997 data).