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The U.S. healthcare system has been subject to unprecedented scrutiny over the past three years; one of the results of this scrutiny has been recognition of the serious problems that exist in both healthcare delivery and reimbursement mechanisms. While the verbal debate in Washington has essentially ceased, within the healthcare community a historic shift has taken place in the way healthcare reimbursement is structured: increasingly, traditional fee-for-service reimbursement methods are being replaced with capitation reimbursement methods. While this phenomenon originated on the West Coast, it has spread to all geographic sectors of the United States in varying degrees and can be expected to dominate the funding patterns of healthcare over the next decade.