Preparing for managed care: family practice residents and capitated care in community health centers

This article examines the financial impact on patients of family practice residents when a community health center (CHC) serving as a residency training site is converted to a capitated payment system. The costs in this analysis included using and educating family practice residents at CHCs, the cost of patient encounters at CHCs, and the cost of contracted capitated services. These costs were measured against capitated per member per month (pmpm) payments received by the CHC. If capitated patients were cared for by residents, the CHC would lose $8.42 pmpm. The CHC faced a $5.98 pmpm loss if it used staff physicians rather than residents. This analysis suggests there are educational costs associated with training physicians in capitated health care delivery systems. Family practice residencies and CHCs must prepare for the conversion to capitated systems; academic centers with managed care contracts must control patient encounter costs and utilization to remain competitive.