“Delegated model” describes a health insurance payer where financial risk for healthcare services is transferred from an insurance payer to health care providers (e.g., physicians, medical groups, or hospitals.) Most commonly, this involves the insurance payer paying a fixed, per capita dollar amount (a capitation rate) to a group of physicians, and the physicians assume financial responsibility to provide health care services for each health plan member.
Delegation started as a way to share risk.
Physician groups formed to allow providers to contract more efficiently with plans
A core premise of the delegated model is that assuming a meaningful degree of financial responsibility for healthcare purchasing decisions is key to ensuring those decisions strike the right balance between fiscal responsibility and providing high-quality care.
In California, which adopted this model earlier than most states, capitation can only be used in health maintenance organization (HMO) plans. Other common types of plans, PPO-style plans and other fee-for-service (FFS) plans cannot use capitation.
Challenges with the Delegated Model for Cancer Patients
Delegates have taken on a gatekeeper role. They are at financial risk for utilization and referrals to out-of-network specialty care. As a result, they rely on narrow networks of providers that may be effective in managing costs, but in the case of cancer patients, may create obstacles to accessing the best available care, including clinical trials.
Delegates with a restricted choice of providers allow them to offer a health plan product at a lower premium, but in many cases these narrow networks do not included access to National Cancer Institute (NCI)-designated comprehensive cancer centers and Academic Medical Centers (AMCs) where the latest innovations and therapeutics are developed and more readily available.
Leading-edge cancer care is not equally available in all clinical settings – hospitals and physician groups have widely varying levels of experience and expertise, particularly when it comes to the treatment of rare and complex cancers or performing complex procedures.
As a result, the exclusion of hospitals and AMCs with cancer expertise can delay or impede expert care for many cancer patients with complex cancers best treated by oncologists who have experience in treating patients with a particular type of cancer.
The delegated model’s restricted networks may be appropriate in a primary care context, or for patients with back pain or gallstones—because these conditions are not immediately life-threatening and the expertise for these conditions is generally available—but they do not for cancer patients. In the context of cancer, and particularly as genomics and technology make cancer care more personalized, effective, but often more complex, they create barriers for patients to obtaining specialized, potentially lifesaving care in a timely manner.