Consider the following scenario: you are the CEO of Peakside Primary Care in Hightown, Colorado, a city of about 25,000 persons. The major insurer in town has a majority of the market share in the community and has approached you about a capitation contract for 3,000 of their 15,000 enrolled lives. Your discussion question response entails three separate parts:

Describe how you would set a capitation rate (price) per person, per month (PMPM) for this contract (explain yourself a lot)

Discuss the budgeting process you would implement for this new deal. Why would you use that approach?

Describe any changes you think need to be made to your approach to budgeting in order to succeed with your capitation contract.