- In a Feb. 18, 1971 health care strategy speech to Congress, President Richard Nixon recommended that government grants to schools of medicine, dentistry and osteopathy be in the form of capitation grants based on the number of graduates. He favored this approach because schools could count on a fixed amount of federal money each year and make long-range plans accordingly. He believed that rewarding output rather than input (i.e., the number of enrolled students) would make the education system more efficient and give schools a strong incentive to shorten their curricula and produce more graduates per year.
- In an April 2009 report, the American Association of Colleges of Nursing suggested that capitation grants could ease faculty shortages and help pay for infrastructure improvements. Nursing education costs are high because of the need for lab equipment, software, simulated hospital units and mandated high faculty-staff ratios. From 1971 to 1978, Congress provided capitation grants to nursing schools based on student enrollment. Congress introduced the Nurse Education, Expansion and Development Act in 2009 to increase the number of faculty and students at nursing schools. The association believes that this act could pave the way for more nurses that society needs to help care for the aging population.
- Anti-corruption organization Transparency International notes in its 2010 "Africa Education Watch" report that capitation grants are an important part of the decentralization process and it facilitates more local oversight and accountability. Capitation grants in Ghana, Sierra Leone, Madagascar and Uganda provide schools discretionary spending power. According to the government of Ghana, capitation grants improve equity because they ensure that schools serving the poorest communities receive at least minimum resources.
- The New Zealand Ministry of Health provides capitation funding based on patient enrollment in primary health organizations, which include most doctors, nurses, medical centers and other health care providers. The organizations receive funding based on the number of patients enrolled, not on the number of times a health care provider sees a patient. The New Zealand capitation system adjusts for demographic factors, such as the number of young and elderly in the population who tend to need more care. The system is flexible in that it does not require doctors to see patients during each visit, which reduces costs because nurses can take care of some patient needs.
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