"Managed Care Update"

Capitated Contracts Losing Favor Within the Hospital Industry

As more hospitals reject capitated contracts, insurers expect to see further earnings erosion.

IT APPEARS THAT AN INCREASING number of hospitals in mature managed care markets like California and Colorado are rejecting capitated managed care contracts.

If future events verify this trend, the experience of hospitals may demonstrate a way for clinical laboratories to reject capitated arrangements for laboratory testing in favor of other types of agreements.

California is the

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