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PubMed2001

Capitation registration and social deprivation in England. An inverse 'dental' care law?

OBJECTIVE: To examine associations between NHS child dental registration data and area deprivation scores of English Health Authorities (N= 100) in 1996/97 and 1997/98. METHOD: The Department of the Environment index of local conditions and the Jarman Underpriviledge Area Score from the 1991 census were used to measure deprivation. Prior to September 1997, children got free dental treatment under a capitation scheme with an NHS dentist. If they did not attend within 24 months their registration lapsed on the last day of December of the second registration year and they were deleted from the capitation list. After September 1997 the registration period was reduced to 15 months. OUTCOME: Curve-linear regression of the Health Authority (HA) percentage of children registered, lapses in capitation registrations and deprivation scores. RESULTS: In England 68% of children were registered in December 1996. The percentage registered in each Health Authority was associated with deprivation (DoE, r2=0.33, Jarman, r2=0.27 p<0.01). In January 1997, 17.8% (1,345,142) of children registered lapsed (HA range 12.8% to 30.3%) and this was also significantly associated with deprivation (DoE r2=0.66, Jarman, r2=0.51 p<0.01). Similar results were found in 1997/98. CONCLUSIONS: Registration and lapse rates were significantly associated with social deprivation confirming that there is an inverse 'dental' care law for children in England. NHS capitation may widen dental health inequalities.

Adolescent↗
PubMed1998

Competition through physician-managed care: the case for capitated multispecialty group practices.

The dominant managed care model in the USA is the individual practice association (IPA), in which physicians in separate practices contract with a health plan. One alternative model, the capitated multispecialty group practice (CMGP), has some distinct advantages: (i) the best randomized trial comparing a health management organization (HMO) with indemnity insurance showed equivalent health outcomes for a prepaid group-practice model HMO, with about a 40% saving in cost, mostly from lower hospital utilization. There is no comparable evidence for IPA-style HMO's; (ii) most managed care plans control costs through 'gatekeeper' primary care physicians or capitated payment. Strong financial disincentives to care, applied to small practices, lead to a significant risk of withholding needed care. Large capitated groups diffuse the risk among hundreds or thousands of physicians; (iii) small practices also lack the financial resources and expertise to develop information systems, continuous quality improvement programs, and other means of improving efficiency. Larger groups can integrate specialty and primary care, laboratory, pharmacy, information technology and other services, to improve quality and cost-effectiveness, while maintaining physician control of the process; (iv) in urban California, HMO enrollment in six large capitated groups increased by 91% from 1990 to 1994. Hospital utilization for these groups was less than half the USA average; (v) because it is self-insured, the CMGP could contract directly with purchasers, eliminating the need for the insurance intermediary. The CGMP offers an ethical, effective alternative that maintains the primacy of the physician in health care: physician-managed care.

California↗
PubMed1996

The effects of capitation payment on the organizational structure of medical group practices.

This study explores the effects of capitation payment on the structural elements used by medical group practices to control physician-directed use of resources and the quality of patient care. Forty-five medical groups located in the highly competitive Minneapolis/St. Paul metropolitan area were studied. The range of capitation payment in these medical group practices is from 2% to 87%. Although the practices vary considerably in the extent to which they have developed these control mechanisms, it does not appear that capitation payment is a major factor influencing that pattern. It appears that many of these medical group practices either use less formal mechanisms than those included in this study to control resource use and the quality of care or use none at all. In either event, the data suggest that the effects of capitation payment on the structure of medical practices may be overestimated.

Capitation Fee↗
PubMed1996

Capitating multispecialty groups.

This article addresses the issues a medical group must consider when entering into a capitation agreement with a managed care organization. It discusses the potential risks of capitation contracts and how those risks can be limited. In addition, keys to successful contracting are explored. Specific considerations outlined include choosing a contracting partner, determining the capitation rate and contract terms, and managing risk. Internal issues regarding the distribution of capitation income, physician incentives and risk pools, and management information systems are also addressed in the article.

Ambulatory Care Information Systems↗
PubMed2002

Effects of capitated mental health services on youth contact with the juvenile justice system.

OBJECTIVE: To evaluate the association between Medicaid mental health capitation and youth's involvement with the juvenile justice system. METHOD: A longitudinal, quasi-experimental pre/post design was used. Using administrative databases, juvenile justice contact, defined as any detention or commitment, was assessed for 13,365 Medicaid-eligible youths, aged 10-17 years, who received public mental health services over a 3-year period (1994-1997) in the state of Colorado. RESULTS: There was no significant effect of financing when secular time was controlled for (interaction financing x time: hazard rate = 0.92, p =.62). The main effects model demonstrates a significant secular trend with juvenile justice contacts decreasing over time for both types of financing (hazard rate = 0.80, p =.002) and a significant effect of financing with eventually capitated sites having higher rates of juvenile justice contact compared with sites that remained fee-for-service (hazard rate = 1.24, p =. 009). Multivariate analyses controlled for demographics, mental health and substance use diagnoses, and other risk factors for juvenile justice contact. CONCLUSIONS: After adjustment for secular trends, capitation was not associated with a reduction in juvenile justice contact. Nonetheless, these findings provide evidence that capitation did not increase the risk of juvenile justice contact.

Adolescent↗
PubMed1980

Capitation payment for pharmacy services: impact on generic substitution.

This article evaluates changes in the rate of generic substitution as well as the appropriateness of such changes in dispensing behavior when the conventional fee-for-service system for reimbursement of pharmacists is replaced by a capitation system. The fee-for-service system under Medicaid usually covers ingredient costs plus a fixed professional dispensing fee. The capitation system provides a cash payment per Medicaid eligible at the first of each month, which varies by aid category and season of the year. The dispensing behavior of pharmacists in two experimental rural counties is examined during a 1-year preperiod in which the fee-for-service form of reimbursement was employed, as well as a 2-year postperiod in which capitation was used in lieu of fee-for-service payments. The results are compared with pharmacist behavior patterns in two other rural counties which remained on the fee-for-service system over the same 3-year period. The data indicate highly significant increases in both the rate of generic substitution as well as the dollar savings per substitution in the experimental counties after the institution of capitation reimbursement. Using explicit criteria, no substantial differences in the appropriateness of generic substitution were noted between the two financing schemes.

Capitation Fee↗
PubMed1981

Capitation payment for medicaid pharmacy services: impact on non-medicaid prescriptions.

Although pharmacy organizations have been instrumental in the movement to repeal antisubstitution laws, there is evidence that under the current fee-for-service system pharmacists have not exercised their newly obtained prerogatives freely. A previous study has demonstrated that paying pharmacists on a capitation basis for their Medicaid patients effects a highly significant increase in the rate of generic substitution. The present study was conducted to determine whether the pharmacists' newly acquired generic substitution habits "spill over" from Medicaid prescriptions as a result of capitation reimbursement. The results indicate that pharmacists who participated in the capitation experiment for the Medicaid drug program significantly increased their rate of generic substitution on non-Medicaid prescriptions. It was concluded that the same pharmacies that increased their substitution rate in the Medicaid program under capitation also increased their substitution rate on non-Medicaid prescriptions. Finally, generic substitutions in both the Medicaid and non-Medicaid studies generally involved the same labelers as well as drugs in the same therapeutic categories and with the same generic classifications.

Capitation Fee↗
PubMed1998

Capitation payment rates and implications for the general pediatrician.

Many pediatricians are beginning to sign capitated contracts that require them to provide services to children on an annual basis for a predetermined price. However, not all children have the same expected cost. Children with chronic illnesses, for example, are much more likely to incur higher costs than their healthy peers. This article summarizes the recent literature on payment systems that have been developed to establish capitated rates. It also summarizes other methods for reducing the risk that pediatricians face when they accept capitated payments. Finally, it discusses physicians'-perceptions of how capitation affects their practice.

Capitation Fee↗
PubMed2001

The manager and equipment decisions: is that in the capital budget?

Although any decision to purchase a piece of capital equipment involves a number of the organization's functions, the department manager has some significant responsibilities in the selection and acquisition of capital equipment. Except for unavoidable replacement of essential equipment that fails unexpectedly, capital purchases must ordinarily be planned in advance through the annual budgeting process. The department manager is ordinarily the organization's primary source of information in major capital expenditure projects; therefore, it is essential that the manager follow a logical process for identifying and evaluating alternative equipment choices and perform a consistent economic analysis of the alternatives.

Budgets↗
PubMed2002

Social capital from carbon property: creating equity for indigenous people.

New incentives for protection and in situ use of forests and the services they provide raise hopes for the reversal of tropical and temperate deforestation. Past management of forests appropriated the rights of forest communities, providing incentives to convert natural forest into financial capital through logging, while destroying the underlying physical property. Carbon trading aims to provide a means to convert the forest property into financial capital, while protecting the physical property of forests, thereby providing new incentives for in situ forest management. The potential for carbon-emission trading as a contributor to these new incentives is tempered by concerns that it is another tool for capitalists to exploit the indigenous communities of the developing world. Estimates of annual emission trading amounting to US $200 billion raise alarm bells about the effect of such trade in the developing world. People are right to be concerned, as the history of exploitation of indigenous people, the appropriation of their rights, the loss of forests and their benefits is well documented. This exploitation resulted in the exclusion of forest communities from the basic tenets for development created by the wealth generated by traded property. However, one virtue of trade is that it can be made subject to constraints. Through international treaties and agreements, trade can be constrained and national governments obliged to observe the rules of trade. The value of tradable carbon credits will be discounted or invalid if they do not meet these criteria, providing all parties with strong incentives to achieve the necessary performance standards relating to both processes and contracts. For carbon trading to develop social capital from natural capital requires the admission of forest communities into the polity and management of forest resources. In this paper we argue for responsible carbon-emission trading based on the clear and appropriate definition of carbon entitlements, with the proviso that trading respects the rights and needs of indigenous people. We adopt this position as emissions trading now seems inevitable and there should be proper rules to control this trade where it affects forests and their inhabitants. It is imperative that the poor and indigenous people are not excluded from these systems. Trading systems and the property systems they depend on need to be more accountable, transparent and inclusive of those features which we propose.

Capitalism↗
PubMed2003

The effect of capitation on switching primary care physicians.

OBJECTIVE: To examine the relationship between patient case-mix, utilization, primary care physician (PCP) payment method, and the probability that patients switch their PCPs. DATA SOURCES/STUDY SETTING: Administrative enrollment and claims/encounter data for 1994-1995 from four physician organizations. STUDY DESIGN: We developed a conceptual model of patient switching behavior, which we used to guide the specification of multivariate logistic analyses focusing on interactions between patient case-mix, utilization, and PCP reimbursement methods. DATA COLLECTION/EXTRACTION METHODS: Claims data were aggregated to the encounter level; a switch was defined as a change in PCP since the previous encounter. The PCPs were reimbursed on either a capitated or fee-for-service (FFS) basis. PRINCIPAL FINDINGS: Patients with stable chronic conditions (Ambulatory Diagnostic Groups [ADG] 10) and capitated PCPs were 36 percent more likely to switch PCPs than similar patients with FFS PCPs, controlling for patient age and sex and physician fixed effects. When the number of previous encounters was included in the model this relationship was no longer significant. Instead high utilizers with capitated PCPs were significantly more likely to switch PCPs than were similar patients with FFS PCPs. CONCLUSIONS: A patient's demographics and utilization are associated with the probability that the patient will switch PCPs. Capitated PCP payment was associated with higher rates of switching among high utilizers of health care resources. These findings raise concerns about the continuity and quality of care experienced by vulnerable patients in an era of changing financial incentives.

Adult↗
PubMed1998

Capitated risk-bearing managed care systems could improve end-of-life care.

Capitated or salaried managed care systems offer an important opportunity to provide high quality, cost-effective end-of-life care. However, capitated healthcare delivery systems have strong incentives to avoid patient populations in need of such care. Care currently provided at the end of life in fee-for-service practice is commonly deficient, with high rates of avoidable pain and other burdens. Only hospice offers a better track record, yet access to hospice is limited, and length of stay is short. Traditional staff- or group-model managed care plans, with their emphasis on prevention, patient education, cost efficiency, service coordination, and integrated provider networks, present a dynamic set of conditions and organizational structures that would support real change. Advantages derived from managed care systems providing quality end-of-life care include coordinated care across delivery sites, interdisciplinary teams, integrated services, and opportunities to develop innovative care programs, service arrays, utilization controls, and accountability for care standards. We propose a special comprehensive system of managed care, which we call MediCaring, for seriously ill persons nearing the end of life. MediCaring would encompass the best elements of palliative care within a managed care structure: comprehensive, supportive, community-based services that meet personal and medical needs, a focus on patient preferences, symptom management, family counseling, and support. Other programs, such as hospice, have shown that continuity and coordinated care, financed through a capitated payment and directed at a special population, are both feasible and effective. There are obstacles to improving care at the end of life. Managed care systems, like most of medical care, have largely ignored the terminally ill patient. Current financing arrangements make it financially undesirable for insurers to recruit or retain the very sick; very ill patients can be costly over a prolonged time. In addition, inertia and habit inhibit change, and there are few criteria by which to judge whether care at the end-of-life is "good." Nevertheless, capitated or salaried managed care systems committed to enhanced end-of-life care seem well positioned to achieve it if payment reimbursements were revised to encourage this end.

Aged↗
PubMed1995

Fee-for-service versus capitation-based reimbursement: how the payment method affects utilization of echocardiographic services by referring physicians.

Historically, health insurance carriers (HIC) have reimbursed physicians on a fee-for-service basis for echocardiographic studies. With the emergence of managed care, the HIC now may have the option of paying on a capitation basis. To determine whether the method of reimbursement had any bearing on the types of patients referred for echocardiographic services, we conducted a two-phase (retrospective) study. In Phase One, we assessed two groups of ambulatory patients with regard to patient characteristics, medical reason for referral, and echocardiographic results. Group A (4,066 patients) had insurance plans that stipulated reimbursement for echocardiographic services as part of capitation for cardiology services. Group B (3,061 patients) had plans that reimbursed for echocardiographic services on a fee-for-service basis. In Phase Two, we assessed a total of 5,947 patients (3,833 from Group A and 2,114 from Group B) over a period of 40 months to determine the frequency of referral for a second echocardiogram within 2 years of a normal one and the repeat normalcy rate. The results showed that the capitation reimbursement group included younger, predominantly female patients who were referred more often for a more benign reason and who more frequently were diagnosed echocardiographically with less severe disease, higher rates of normalcy, and repeat normalcy. These findings suggest that in our geographic area the capitation method of reimbursement permitted more liberal utilization of echocardiographic services. In this era of cost awareness, the study suggests the need for better screening of patients referred for echocardiographic services.

Capitation Fee↗
PubMed1991

Administrative and policy issues in reimbursement for nursing home capital investment.

The way in which states reimburse for nursing home capital costs can create incentives for nursing home owners to use the home primarily as a vehicle for real estate speculation, with potentially adverse consequences for patient care. In order to help promote and control the stability, adequacy, and quality of capital investment in long-term care, an increasing number of states are using a fair-rental approach for calculating capital reimbursement. In this article we compare the fair-rental approach with traditional cost-based capital reimbursement in terms of administration and policy. We discuss issues of concern to the state (cost and reimbursement design options) and the investor (after-tax cash flows, rate of return, etc.). Our analysis suggests that fair-rental systems may be superior to traditional cost-based reimbursement in promoting and controlling industry stability, while at the same time providing an adequate return to investors, without incurring long-term increases in the costs of administering programs.

Capital Expenditures↗
PubMed1997

Cost savings from home and community-based services: Arizona's capitated Medicaid long-term care program.

The Arizona Long-Term Care System is the first capitated, long-term care Medicaid program in the nation to operate statewide. It promotes an extensive home and community-based services program intended to lower long-term care costs by substituting home care for institutional care. Because the program is statewide, finding a suitable control group to evaluate it was a serious problem. A substitute strategy was chosen that compares actual costs incurred to an estimate of what costs would have been in the absence of home and community-based (HCB) services. To estimate the likelihood of institutionalizing clients in the absence of HCB services, coefficients for institutionalization risk factors were estimated in a logistic regression model developed using national data. These were applied to characteristics of Arizona clients. The model assigned approximately 75 percent of the program's clients to a category with traits that were determined to resemble nursing home residents' traits. A similar methodology was used to estimate lengths of nursing home stays. Lengths of stay by the program's nursing home patients were regressed on their characteristics using an event history analysis model. Coefficients for these characteristics from the regression analysis were then applied to HCB services clients to estimate how long their nursing home stays would have lasted, had they been institutionalized. These estimated nursing home stays were generally shorter than these same patients' observed home and community stays. Risk of institutionalization was then multiplied by estimated length of stay and by monthly nursing home costs to estimate what costs would have been without the HCB services option. The expected costs were compared to actual costs to judge cost savings. Home and community-based services appeared to save substantial amounts on costs of nursing home care. Estimates of savings were very robust and did not appear to be declining as the program matured. Savings probably came from several sources: the assessment teams that judged client eligibility were employed by a state agency and thus were independent from the program contractors; clients were required to be in need of at least a three-month nursing home stay; a cap was placed on the number of HCB services clients contractors were allowed to serve each month; the capitated payment methodology forced managed care contractors to hold down average HCB services costs or lose money; and the HCB services and nursing home costs were blended in the capitated rate, so that plans that failed to place clients in HCB services would lose money by using more nursing home days than their monthly capitated rate allowed.

Arizona↗
PubMed1996

Medical groups in California: managing care under capitation.

California-based health maintenance organizations (HMOs) have reduced use of hospital services well below national averages; much of this reduction appears linked to lower surgical procedure rates. Also, multispecialty groups in California have been able to maintain physician compensation under capitated payment arrangements at the expense of retaining earnings at the group level. With capitation payments linked to HMO premiums for commercial enrollees, and with HMO premiums having dropped in response to market pressure from employers, California's provider groups are coming under increased financial pressure. A shakeout among thinly capitalized medical groups is anticipated. As full-risk capitated contracting becomes more common outside of California, these general trends are likely to be replicated at a national level.

California↗
PubMed2004

Do children receiving Supplemental Security Income who are enrolled in Medicaid fare better under a fee-for-service or comprehensive capitation model?

CONTEXT: States have been reluctant to enroll children with special health care needs (SHCN) into capitated managed care, because the financial incentives inherent in such plans may elicit undertreatment, restrict access to specific services and providers, and have adverse effects on quality. Little research has examined how children with SHCN who qualify for Supplemental Security Income (SSI) fare under managed care versus the fee-for-service (FFS) system. OBJECTIVE: To examine how enrollment of children with SHCN with SSI into a Medicaid capitated managed care plan differs from regular FFS with respect to unmet needs and access to care in the District of Columbia. DESIGN, SETTING, AND PARTICIPANTS: We conducted telephone interviews with a random sample of 1088 caregivers of children with SHCN who resided in the District of Columbia during the summer and fall of 2002. MAIN OUTCOME MEASURES: 1) Usual source of care; 2) unmet need for the following services during the 6-month period prior to the interview: physician/hospital, mental health, therapy services, dental care, durable medical equipment and supplies, prescription drugs, and home health services; and 3) caregivers' ratings of dimensions of access to services. RESULTS: The percentage of FFS children who did not receive needed dental care, durable medical equipment/supplies, or prescription drugs was significantly larger than the percentage of children enrolled in the capitated managed care plan. We found no significant differences by plan type in unmet need for physician/hospital care, mental health services, home health service, or therapy services. The most problematic areas of access seem to be "wait time between making an appointment and the actual visit," "waiting time in the doctor's office," "office hours for appointments," "getting medical advice by phone," and "getting specialist's care if needed." For each of these dimensions of access, children in the FFS system experienced significantly more of such access problems, compared with children in Health Services for Children With Special Needs (HSCSN). These 4 dimensions of access cause problems for 18% to 29% of FFS parents but only 13.6% to 22.3% of caregivers with a child in HSCSN. Three other dimensions of access, "convenience of doctor's office," "getting emergency care if needed," and "getting hospital care if needed," also seemed to pose significantly more problems for caregivers with children in FFS plans, compared with those in HSCSN. These dimensions of access were only problematic for 9% to 14% of FFS caregivers and 5.9% to 7.7% of caregivers with children enrolled in HSCSN. CONCLUSIONS: Children in the managed care option have lower levels of unmet need than children in FFS plans. Caregivers of children in FFS plans encountered more difficulties in navigating the health care system, compared with those with children in managed care. We conclude that a combination of factors that characterize the capitated managed care plan are responsible for improving access to care and mitigating the level of unmet need among children with SHCN. These include the comprehensive care plan assessment, ongoing case management, primary care providers' gatekeeping role, and higher physician reimbursement.

Adolescent↗
PubMed2002

Utilization of orthopaedic services in a capitated population.

BACKGROUND: The utilization rate for orthopaedic services (office visits and surgery) is not well known. The purpose of this study was to determine the utilization rates for orthopaedic office visits and surgical procedures in a large population of captured lives. METHODS: The study population comprised an average of 134,902 persons per month who were enrolled under a capitated insurance plan between January 1999 and December 1999. This plan was serviced by an independent physician association of sixty-two orthopaedic surgeons who were responsible for all orthopaedic care. Data were collected prospectively and stored in a centralized database. All analyses were conducted with use of monthly averages. Poisson regression was used to compare utilization rates and to calculate odds ratios in order to determine whether the utilization rates varied by age and gender. RESULTS: The highest proportions of office visits were due to fractures (21%), osteoarthritis (4%), meniscal tears (4%), and low-back pain or sciatica (4%). Knee arthroscopy (30%), foot and ankle procedures (10%), and spine procedures (9%) accounted for the highest proportions of surgical procedures. The overall utilization rates were 6.96 office visits and 1.99 surgical procedures per 1000 covered lives per month. Across all age groups, males and females did not differ with respect to the utilization rate for office visits (p = 0.42) or surgery (p = 0.09). Increased age was significantly related to increased utilization rates for office visits (p < or =0.0002) and surgery (p < or = 0.002). CONCLUSIONS: These data may be used to determine the size of a capitated population that an orthopaedic practice can accommodate, to determine the number of orthopaedic providers that is needed to provide services for a capitated population, and to estimate the expenses associated with providing orthopaedic services for a capitated population in an orthopaedic practice.

Adolescent↗