A capitation-based prospective reimbursement mechanism for linking academic medical centers with health maintenance organizations.

Recent changes in the medical marketplace have led to increased competition among health care delivery organizations. Despite this, the academic medical center (AMC) and the health maintenance organization (HMO), even with apparently divergent goals, can interact so that both parties benefit. By developing a risk-sharing prospective reimbursement contract, the HMO can better predict tertiary care expenses. Concomitantly, the AMC can broaden its market and increase its access to patients requiring its technologically sophisticated services. This article presents a mechanism for creating a prospective reimbursement contract with mutually beneficial incentives. Implications of the methodology are also discussed.