Brave new world

The simple appeal of capitated primary care: Practicing without copays, per-visit billing or RVUs

Cole Zanetti, DO, MPH, and Farhad Modarai, DO, share their experiences with the model, which incentivizes coordination and preventive care.


At first, taking a free yoga class at her doctor’s office was simply a way for the patient to increase her strength and flexibility. But soon the woman, a retired Denver resident, befriended her classmates and developed a routine: After each class, they’d walk to a nearby store and shop together. “Our practice has meant so much to her, not just for her health, but for companionship,” says Cole Zanetti, DO, MPH, who practices at at Iora Primary Care, a capitated primary care clinic that operates in several states.

Addressing health needs beyond the strictly medical is one of the hallmarks of capitated primary care, which Modern Healthcare recently dubbed “the next disruptive innovation in health care.” Under this model, a practice works with health insurers to negotiate a prepaid monthly rate for a set population of patients. The practice is then responsible for all health costs for those patients, from primary care to inpatient services at nearby hospitals. Since costs are paid upfront, billing is streamlined and patients can see their primary care team as often as needed without copays.

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Dr. Zanetti and Farhad Modarai, DO, who practices at a capitated primary care clinic in Tennessee, say this care model gives them more time with patients while lightening their administrative burdens. Here’s a closer look.

Capitated primary care in action

Iora Primary Care in Denver uses a capitated model to care for patients who are part of Humana’s Medicare Advantage plan, Dr. Zanetti explains. Each patient is assigned to a physician and a health coach and can receive care in the office, by phone, by telemedicine or by home visit. Dr. Zanetti treats between seven and 10 patients on a typical day and estimates that 85% of his time is spent on patient care, with 15% spent managing electronic health records and completing paperwork.

Farhad Modarai, DO

At office visits, which average one hour, the patient, physician and health coach sit around a circular table viewing the patient’s medical records. Iora Primary Care uses a proprietary electronic medical record system that’s designed to be physician-friendly and easy for patients to understand.

“We get to push the limits of creativity in how care is delivered,” Dr. Zanetti says. “In capitated primary care, the incentives actually make sense. When our quality of care is better and our patients are healthier, our practice does better financially.” On the downside, Dr. Zanetti notes that insurance companies must agree to the capitated payment structure, which limits the pool of potential patients.

Dr. Modarai works for CareMore Health System and practices in its Hickory Hill clinic in Memphis, which cares for 12,000 Medicaid patients using a capitated primary care model. The care team, which includes physicians, nurse practitioners and social workers, help patients with social needs, such as finding affordable housing, as well as addressing medical issues. “Because we can offer longer appointments or see patients every day if needed, capitated primary care gives clinicians the freedom to give our sickest patients extra attention. That can help us bend the cost curve of their care,” Dr. Modarai says.

Mind, body, spirit

Because of its emphasis on personalized, holistic care, capitated primary care is a natural fit for DOs, Drs. Zanetti and Modarai agree. “We want to know what our patients are struggling with, not just physically, but existentially,” says Dr. Zanetti.

In the future, Dr. Modarai predicts increasing interest in alternative health care delivery models, either capitated primary care, direct primary care or another model. “Rather than a blockbuster drug or a new medical technology, innovations in our systems of care will really be what define the health care of the future,” he says.


  1. Alan S. Brooker, DO,MBA Chief Physician Executive, Managed Care Services, Dignity Health Medical Foundation

    Kudos to primary care physicians willing to embrace this change. These practices are truly patient-centric. The physicians are part of a care team and understand the need to collaborate and delegate in order to achieve the best patient outcome. Many fear capitation based on ancient models where incentives were not aligned. These newer models focus on quality. When that is achieved financial success will follow.

  2. Dr. D

    “When our quality of care is better and our patients are healthier, our practice does better financially.” While this may sound noble, the bottom line is that the less is spent on caring for a patient, the more financially rewarding for the practice. How can one not see the potential conflict of interest here! This model has failed before and is NOT in the patient’s best interest.

    1. Stephen Kabel, DO, FACP

      I agree. Saw the faults of capitation in past. As a pcp, why spend my own money on supplies such as injectable steroids when can refer pt to orthopedics. Or just accept monthly cap payment and refer cap pts out freeing schedule for ffs pts. Let the cardiologist do the preoperative eval. And no incentive to squeeze in sick pts or get pts in quickly for their convenience. No next day appointments for physicals. Pt will need to wait 4 to 6 months if only seeing 10 pts a day.If all pcps seeing 8 to 10 pts per day, who will see the rest…ers or urgent care at exorbitant rates? Most pcps see 20 to 30 pts per day.

    2. Anonymous Student

      How could 8-10 patients per day be a good thing for the general population? Most PCPs see 25-30 patients per day and could easily increase that number if they worked longer. This article is trying to sell a lemon.


    …7-10 pts/day…REALLY…on what planet? We “experimented” with HMO/capitation in 1980. (That might be before these physicians were born!)…3 patients walked in during the 1st week, since they DID NOT HAVE INS PRIOR. BRAIN TUMOR, KIDNEY TRANSPLANT, LEFT VENTRICAL RESECTION…left us with 2 (i.e. TWO) year defecit. Wake up boys and girls!!!

  4. Alan S. Brooker, DO, MBA

    A not surprising response from physicians who experienced capiation in the bad old days when the paradigm was what the insurance business referred to as cap and run. There was no support for the doc. He/she was it. The authors are part of a team delivering primary care. In the traditional primary care practice, (student above: pay attention!) seeing those 25-30 patients per day, how many really need to see a physician? And, those docs are miserable, just read the surveys. In a team based, patient centered medical home, the physician works at the top of his/her license, there are care coordinators, care managers, PA’s and NP’s, social workers, health coaches and pharmD’s who assume much of the day to day care in collaboration with the physician, the team leader. This makes the care of a large panel of patients manageable, and rewarding. The days of a PCP slogging through a relentless schedule of mole’s, colds and itchy holes, with no time to give to those who really need a doctor are thankfully disappearing.

  5. Adil Manzoor DO, PGY-2

    If the physicians who commented negatively above understood the capitation payment model they’d realize, very quickly, how financially and psychologically rewarding this system is, as it has the ability to provide comprehensive care.

    I, a resident, spent time in this system and rotated in Colorado after reading this, as I thought, this was hocus pocus at first, but then quickly realized, that this system has the ability to change health care.

    Here, the goal isn’t to treat the problem your patient comes in with, but to teach your patient what the problem is, and how to take care of it so that the need for physicians decreases & based on the payment model, it works perfectly. The physician is truly compensated for her/his time instead of the scraps most are collecting from insurance companies, who care not about the patient nor the physician, but their income.

    Burnout rate is ever increasing year by year (see the Medscape report for 2016 burnout),as more patients have healthcare and more have to be seen, physicians will burnout; there’s a reason NP’s can now practice independently in many states, and PA’s are slowly going in that direction also.

    This system allow us to teach the patient’s how to manage their chronic conditions and their acute problems and that I believe is the only way from preventing the current system to clog up with more of the insured and prevent it from collapsing.

    This systems rewards will not be seen instantly, as our generation is used to seeing, but with time, we will see them; the data will be published and the rest of the systems will follow suite.

    And all systems will have their problems, but there will be physicians and others who will work to resolve them.

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