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Provider Payment Incentive and Risk Explorer
Change service use, patient complexity and quality performance to see why provider revenue responds differently under fee-for-service, bundled payment, capitation, a global budget and a blended arrangement.
Teaching model: The figures are synthetic and illustrative. They do not recommend a payment level or predict provider behaviour.
Change the scenario
Changes billable services and estimated provider cost.
Changes the number of bundled episodes paid.
Raises expected cost. Risk adjustment can partly change population-based payment.
A score of 80 or higher earns a 3% quality addition in the blended method.
Illustrative annual results
Estimated provider cost£900,000
Highest payment£1,030,000
Lowest payment£1,000,000
Each method is calibrated to £1,000,000 at baseline before the blended quality addition. Bar length shows total provider payment in the current scenario.
| Payment method | What triggers payment | Payment | Margin | Who bears more risk when use or cost rises? |
|---|
What this scenario shows
How the teaching model works
The model holds the enrolled population and global budget constant. It changes service volume, completed episodes, patient complexity and a simple quality condition so that the revenue and risk differences remain visible.
Equations and assumptions
Baseline payment = £1,000,000
Estimated cost = £900,000 × service-use index × complexity index
Fee-for-service = baseline payment × service-use index
Bundled payment = baseline payment × completed-episode index
Capitation = baseline payment × risk-adjustment factor
Global budget = baseline payment
Blended payment = 70% capitation + 30% fee-for-service + quality addition
Quality addition = 3% of blended base when quality score ≥ 80
Risk-adjustment factor = 1 + 0.5 × (complexity index − 1), when selected