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PubMed2004

The predictability of individual primary care costs and its impact on managed care plans.

In the context of reorganizing the delivery of primary care, a better understanding of the evolution of family practice costs would be useful for those managing the health care system. This study examined the level of use and transition probabilities of remaining a low user of physician care in family practices over 5 years among a population with no restriction of age or functional status. The entire population (n = 285, 305) of one administrative area of the Province of Quebec (Canada) was followed from 1996 to 2000 and classified for each year into seven cost categories according to individual costs of care in family practices. The Pr of staying in the same category or moving to another one has been examined and these transitions were calculated for 2, 3, 4 and 5 year-periods. Recourse to care was very stable over time. The Pr of staying in the same cost category or moving to the adjacent one was always 91% between 2 years and still as high as 86% between 4 years. Less than 5% of the population jumped over more than two categories. More than three quarters of the population never exceeded Candollar 200 over the 5 years while only 2.5% had a chance to reach Candollar 500. Costs of care in family practices were highly correlated with visits (r = 0.94), suggesting the role of chronicity as a determinant of expenditures in these settings. The stability of individual costs of care in family practices illustrated by the high transition probabilities over time indicates the possibility to forecast these costs in a perspective of capitation payment plans.

Adolescent↗
PubMed2007

Development of a capitation scale for IDF career soldiers in Israel.

The Israeli National Health Insurance Law allocates a national healthcare budget to the sickness funds, which provide medical care to civilian population. Medical care for members of the IDF is financed through the budget of the Ministry of Defense and is not included in the national healthcare budget. Benefits provided to soldiers serving in the permanent forces are far more extensive than those provided to civilians. Because of no co-payments, poor management, and the cost-based budget, military healthcare costs in Israel are expected to exceed civilian healthcare costs, adjusting for age and sex. The present paper derives age- and sex-based capitation rates for military personnel, and compares military and civilian age-based expenditure and capitation rates. The study population comprised career soldiers and civilians aged 21-54 years. Expenses of career soldiers were calculated to provide information on the financial costs of medical services for each age group in 2003. Overall expenses for women were higher than for men in all age groups. As anticipated, the older the group, the higher the total expenditure for both men and women. In-patient care represented a higher percentage of the total costs for men (28.3%) than for women (22.1%). Emergency room care was higher for women in the 22-24 age group but comparable to that of men in higher age groups. Specialist visits represented a significantly higher percentage of the total costs for women than for men in the 22-24 and 25-34 age groups (by 6% and 15%, respectively). The difference decreased to 13% in the 35-44 age groups and, in the 45-54 age group, the difference for men was 14% higher than for women. Military costs were similar to civilian costs in the 22-24 age groups, higher in the following two groups, and lower in the 45-54 age group. Like in other organizations, military healthcare services might benefit from outsourcing. The inequality in medical services to soldiers and civilians, the over-use of the military healthcare system, and the decrease of standards and budgetary resources will compel the establishment of more creative means of providing these services through contracts and agreements, perhaps through the civilian sickness funds.

Adult↗
PubMed2006

The revenue cycle: what it is, how it works, and how to enhance it.

Understanding the revenue cycle process helps perioperative personnel and managers improve health care charging practices and enables them to make informed policy decisions. Integrating knowledge of the revenue cycle processes throughout an organization can improve reimbursement, improve compliance with reporting requirements, reduce payer denials, and decrease rework by staff members. This article provides information to develop a basic understanding of the revenue cycle and makes suggestions on how to improve this process in health care organizations.

Adult↗
PubMed1998

Capitation for cardiologists: accepting risk for coronary artery disease under managed care.

Patients with chronic disease may be excluded from capitated managed care plans due to higher than average expected costs. In an attempt to remedy this inequity, one type of risk adjustment technique proposes to set separate capitation rates for certain chronic illnesses, including coronary artery disease (CAD). Cardiologists, who increasingly are requested to accept capitation, will benefit from understanding the impact of using clinical factors as opposed to using demographic factors to set capitation rates. Using a 5% national random sample of the 1992 Medicare population, we determined mean annual expenditures and variation in expenditures of individuals with CAD. We compared the use of 2 demographic factors currently used for capitation rate adjustment (age and gender) with 2 factors not currently used--3-digit International Classification of Disease (ICD-9) code (a measure for severity) and Charlson index (a measure for comorbidity). Mean annual expenditures for individuals with CAD were more than double mean annual expenditures for the general Medicare population ($6,944 vs $3,247). Among individuals with CAD, mean expenditures of subgroups defined by both age and gender ranged from $6,205 to $7,724. In comparison, stratifying by measures of severity and comorbidity identified subgroups with lower and higher mean expenditures, producing a range of $1,702 to $19,959. Substantial variation of expenditures for individuals within subgroups defined by severity and comorbidity remained, with few patients having substantially higher expenditures than the rest. When capitation rates are set with the use of demographic factors alone, patients may be subjected to risk selection and physicians to financial loss. Using clinical measures may decrease the incentive for patient risk selection, but substantial financial risk to physicians would remain, because of a relatively few patients with high expenditures (or costs).

Aged↗
PubMed1995

The role of the rehabilitation physician in the postacute continuum.

Compared to just 10 years ago, the US health care terrain looks much different today. In 1985, hospitals were the hub of a bustling delivery system that focused on acute care services and undervalued primary or preventive care. Health insurance benefits created incentives for consumers to use hospitals where their care was fully reimbursed, and discouraged office visits for which there were hefty copayments. Today, admissions into acute care hospitals are screened by none other than those same primary care physicians. These gatekeepers often have more authority over patient services and referrals than do the specialists and the hospitals. Financial incentives have made a 180 degrees shift, now motivating consumers to use outpatient care and office visits to satisfy the majority of their health care needs. Moreover, there are currently health care providers actively delivering a wide range of treatments and services that were not available or "covered" a decade ago. The migration of treatment out of hospitals into the vast frontier of postacute care has revolutionized our thinking about how patients receive treatment, in what locations, and by whom. This article describes the trends in financing and in clinical innovation that have contributed to the expansion of postacute alternatives. The factors that most clearly contribute to new opportunities facing rehabilitation physicians in postacute care are discussed, as are the added competencies required of those who choose to take a leadership role in the postacute delivery system. A case study of one model "managed care system" where the rehabilitation specialists are driving the care is presented. The future for rehabilitation specialists who are positioned to participate in setting the standards for high-quality postacute and chronic care in a future marketplace dominated by managed care is discussed.

Aged↗
PubMed1995

The changing nature of ambulatory rehabilitation programs and services in a managed care environment.

Rehabilitation providers have been experiencing the impact of managed care on their services for many years. However, the outpatient, or ambulatory, segments of rehabilitation and their inpatient counterparts are being reshaped differently by this payment source. Because most ambulatory patients do not originate from an inpatient setting, managed care contracts directly with providers rather than flowing contracts through the hospital setting. Thus, ambulatory rehabilitation, more than other elements of the rehabilitation industry, is dependent on contracting to ensure patient flow.

Ambulatory Care↗
PubMed1996

A cost and outcome model of fertility treatment in a managed care environment.

OBJECTIVE: To build a financial model of a fertility practice operating under managed care. DESIGN: Financial model in Microsoft Excel (Redmond, Washington). SETTING: University-affiliated infertility practice, assuming primary care referral of patients and total revenue a function of the capitation contract. PATIENT(S): Female infertility patients and their partners with assumed mean age of 35 years. MAIN OUTCOME MEASURE(S): Breakeven capitation rate. RESULT(S): Every other month ovulation induction produced the lowest breakeven capitation rates in the model. Breakeven capitation rates increased from $0.85 up to $4.70 per member per month as utilization increased from 0.1% to 1% of health plan members. Decreasing the cost of an IVF-ET cycle $2,050 decreased breakeven capitation rates from $0.05 up to $0.80 per member per month as utilization of fertility services increases from 0.1% to 1% of health plan members. Decreasing average yearly pregnancy rate from 56% to 41% increased breakeven capitation rate from $0.10 to $0.80 per member per month across similar utilization. The average cost of pregnancy per year ranged from $6,787 to $21,075. CONCLUSION(S): As utilization of fertility services increases, cost reductions no longer exist to offset increasing breakeven capitation rates. Financial modeling, using actual data, can evaluate any medical decision in terms of outcome and the cost of that outcome. Modeling is an effective means for physicians to educate themselves concerning the cost of their fertility and medical decisions.

Capitation Fee↗
PubMed2000

Global capitation at a women's health referral center: the challenge of patient selection.

Global risk capitation as a preferred payment method in heavily penetrated managed care markets poses important challenges for women's health care tertiary referral centers that employ participating primary care physicians. Global risk capitation agreements expose those centers to the adverse financial effects of high frequency of obstetric visits, costly infertility and neonatal care, and care of a disproportionate number of patients with complex, resource-intensive conditions.

Capitation Fee↗
PubMed1998

Managed care, capitation, and otolaryngic allergy.

The method of health care financing and delivery has evolved over the last decade with managed care making a clinical and financial impact on otolaryngology practices. The trend is for third-party payers to shift the financial risk of delivering care to the physicians. Otolaryngologists must now be versed in reading and negotiating managed care contracts and be cognizant of the business processes in their practice. Otolaryngology practices of the 90s will have to demonstrate competence in their ability to standardize administrative processes and contain administrative costs.

Capitation Fee↗