Capitation helps to limit unnecessary services and excessive costs. It is an alternative to fee-for-service, where providers are paid for the service provided, not the number of patients. With capitation, providers have greater financial security and are dissuaded from ordering more procedures than necessary.
With capitation, however, a patient may spend less time with a provider if the provider chooses to increase profits by decreasing the time spent with patients. However, with greater financial security, providers can also focus on quality face-to-face services and encourage preventive care.