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What Are Capitation Fees?

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Rajesh Shri answered
Capitation fees are fees paid in the form of a donation or grant to a doctor or a hospital or an educational institution to avail of the facilities and service. It is a per capita fee based on the number of people who are going to be benefited by the service like for example in the above mentioned cases patients and pupils.

Capitation fees are essentially stipulated to cover the cost of providing the service to an individual rather than the actual cost of providing the service on the whole. Capitation fees are almost always separately charged from the mandatory fees applicable for the availing of certain services with the aim to maximize the returns on investment.

In some places capitation fees are routinely charged especially in the field of higher education; the capitation fees model is either in most cases profit based or in some cases welfare based where the capitation fees are reutilized to provide education for scholarship students or those who are from an economically backward background.

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