bursement methodologies that create appropriate incentives. In the tract, the PHO assumes full risk for patient utilization, so the con- ing firm recommended that all component providers be capitated to n cost minimization incentives across the entire PHO. Furthermore, itation of all providers would eliminate the need for risk pools, a sharing arrangement that the PHO has never used. In addition to consulting firm's report, Dr. O'Donnell decided to ask a new PHO rations committee for a short report on the current status of the or PHO providers. The committee provided him with the following