homes” in the US (Goroll et al., 2007) and at least one US insurance scheme has experimented with capitation payments for primary care providers (Ash and Ellis, 2012; Ellis and Ash, 2012). If fun-ders wish to ensure that patients with greater needs for health care carry a larger capitation, to reduce financial incentives for providers to cream skim or dump patients, or to give providers incentives to improve outcomes, then it is necessary to know how patients’ expected cost varies with their characteristics (Schokkaert et al.,1998; Sibley and Glazier, 2012; Ash and Ellis, 2012). Despite theprima facie importance of morbidity as a determinant of health care costs, most primary care capitation systems currently relate payments only to patient age and gender.