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Peritoneal dialysis in Ontario: a natural experiment in physician reimbursement methodology.

BACKGROUND: The factors that determine dialysis modality selection and distribution are not well understood. Physician reimbursement incentives have been suggested to play an important role. Under the fee-for-service system in Ontario that existed prior to July 1998, nephrologists were paid about sevenfold more for a hemodialysis (HD) patient than for a patient on peritoneal dialysis (PD). However, since then, nephrologists have been reimbursed via a modality-independent capitation fee, whereby payment for any form of dialysis is the same. This was expected to markedly increase the use of PD. METHODS: When the capitation fee was introduced in 1998, a survey questionnaire of all Ontario nephrologists was done and repeated 3 years later (response rate 62.5%). Changes in dialysis modality incidence and prevalence rates in Ontario and in the rest of Canada were examined. RESULTS: On a scale of 1 to 7, nephrologists were convinced that the capitation fee was a good thing (mean rating 6.07); 75% said they had been seeing patients at every dialysis under the old system, compared to 41% now. Of significance, the proportion of prevalent patients on PD in Ontario declined from 27.3% in 1997 to 19.7% in 2000, increasing to 22.6% in 2002. Similarly, the incident PD rate seems to have stabilized, while the use of nonhospital-based HD has increased. CONCLUSIONS: Following the introduction of the capitation fee, PD use in Ontario continued to decline for 2 years, and then began to increase. In the rest of Canada, there are continuing declines in PD use. This is consistent with the hypothesis that the new incentives caused by the altered physician reimbursement are acting in a subtle way to increase PD and non-hospital-based HD. A longer period of observation may be required to assess the complete effect.

Capitation Fee↗

The effect of practitioner compensation on HMO consumer satisfaction.

PURPOSE: To test the hypothesis that a health maintenance organization (HMO) consumer's satisfaction depends on the way his or her health plan compensates practitioners. DESIGN: Consumer Assessment of Health Plans (CAHPS) survey data from 1999 and 2000 were provided by the Office of Public Insurance Counsel for the state of Texas. These data were combined with the Health Plan Employer Data and Information Set (HEDIS) quality measures of managed care health plans in Texas published by the Texas Health Care Information Council. METHODOLOGY: The study fitted the CAHPS survey data to an ordered-probit model. The dependent variable was customer satisfaction with the health plan, using a rating scale from 0-10. The independent variables included the percentage of health plan practitioners compensated with capitated fees, the percentage compensated with a bonus or withholding incentive, and other health plan and consumer characteristics. PRINCIPAL FINDINGS: Consumer satisfaction with HMOs is negatively correlated with the percentage of practitioners who are compensated on a capitated-fee basis and positively correlated with the percentage of practitioners compensated with a fee-withholding incentive (e.g., a fraction of fees that are withheld until specific quality and cost-control goals are reached). Neither the percentage compensated under a bonus incentive system nor the percentage of general practitioners with board certification correlated with HMO consumer satisfaction. CONCLUSION: A managed health plan's method of practitioner compensation can affect participant satisfaction in a predictable manner.

Adult↗

The effect of capitated and fee-for-service remuneration on physician decision making in gynecology.

OBJECTIVE: To evaluate the variations in physician behavior leading to performance of gynecologic surgical procedures related to fee-for-service and capitation reimbursement systems. METHODS: This study compared the physician practice utilization of surgical services for fee-for-service and capitated contract reimbursement systems within a gynecology clinic. Attending gynecologists were reimbursed on a fee-for-service basis for all surgical services performed during a 6-month interval; subsequently, the same physicians were reimbursed on a capitated basis for 6 months and received a fixed payment for the clinical and surgical services provided. RESULTS: Three thousand seven hundred eighty consecutive outpatient gynecology visits were evaluated at the university gynecology clinic during 1994. We found a 15% overall decrease in the number of surgical procedures that were performed during the capitated reimbursement period compared with the fee-for-service time interval. The procedure most responsible for the reduction of surgical services was elective sterilization by laparoscopy, which underwent a statistically significant decrease (P < .01). CONCLUSION: The remuneration system in our review seemed to affect physician decision making for only the most elective procedures, whereas physicians maintained similar practice patterns for more severe conditions. Fee-for-service seems to encourage, whereas capitation seems to discourage, gynecologist from performing elective procedures.

Adult↗

An investigation of the medical care utilization of children with severe asthma according to their type of insurance.

A comparison of the medical care utilization of children with severe asthma according to insurance type was performed. Subjects were grouped by which type of insurance they had: capitated, fee for service, or Medicaid insurance. Medical records were coded into utilization categories, by presenting complaint, sick- or well-child visit, and if a generalist or specialist provided care during the visit. The Medicaid group had less specialist, sick-child care than the groups with capitated or fee for service insurance. The Medicaid group also had more emergency room visits than the other two groups. The three groups had a similar amount of total physician/clinic visits. Even though similar care was shown to be available for those with Medicaid insurance, this low resource group often uses expensive emergency room care.

Asthma↗

Capitated contracting in radiology: negotiating techniques, financial calculations, and utilization management.

The authors describe how to develop and manage a capitated outpatient radiology contract. Aspects of a capitated fee structure and the need to apportion fees between a hospital and its radiology group are discussed. During negotiations with a managed care organization (MCO), certain information and commitments should be obtained. Utilization data should also be obtained from the MCO, but if they are not available (or are thought to be unreliable), certain norms can be used. Once a utilization projection is arrived at, reimbursement calculations can be made and compared with assumed reimbursements under a known fee schedule, such as that of Medicare. This procedure allows one to estimate whether a capitated proposal is financially feasible. Once a contractual agreement is instituted, the radiology group must then track and manage utilization. An understanding of these principles should enable radiologists to deal effectively with both practice and fiscal concerns presented by managed care.

Adult↗

The Midas touch?

OBJECTIVE: To test the hypothesis that GP trainees are worth their weight in gold. DESIGN: Data collected from 100 consecutive patients analysed with reference to practice statistics, fees, and allowances. SETTING: General practice, Edinburgh. RESULTS: In the year April 1992 to April 1993 the trainee saw 3439 patients, who were worth over 18,000 pounds in capitation fees. The training grant is 4570 pounds, the trainee performed child health surveillance worth 1000 pounds, and items of service fees earned more than 8500 pounds. The trainee brought over 31,000 pounds into the practice in one year. CONCLUSION: Trainees are (almost) worth their weight in gold.

Adolescent↗

Capitation contracts: access and quality.

The implications of competition amongst providers in both private and public systems for the quality of service and the number of care providers are analysed. Strong conditions must be imposed on preferences and cost conditions for quality to be efficiently supplied. In a median voter model of a public system the capitation fee and quality are lower than under competitive market equilibria and the number of practices inefficiently small. Entry control by a union which maximises gross provider income reduces the number of practices until the market is only just covered.

Capitation Fee↗

Quality incentives in a regulated market with imperfect information and switching costs: capitation in general practice.

We model a system akin to the British National Health Service (NHS), in which general practictioners (GPs) are paid by capitation from general taxation. GPs are horizontally and vertically differentiated and compete for patients via their imperfect observed quality. We show that for any given capitation fee quality is lower and the incentive effects of the fee on quality are smaller when there is imperfect information. There are diminishing welfare gains from improving patient information but increasing welfare gains from reducing switching costs. GPs do not act efficiently to improve patient information via advertising or to reduce the costs of switching.

Capitation Fee↗

General practitioners and the new contract: promoting better health through financial incentives.

In this paper the changes in payment of general practitioners in the UK, introduced in the 1990 contract, are described in detail. The effects of the changes on the structure of general practitioners' incomes is discussed. More emphasis on capitation payments may increase preventive activity in general practice, but, depending on the level at which the capitation fee is set, could lead to shifting of patients to other sectors in the health care economy. Target payments appear to have been successful in increasing the numbers of smears taken. It is clear that doctors respond to financial incentives, but what is not clear is whether their responses will always be in the way intended or lead to more efficient practice.

Capitation Fee↗

Percent-of-premium capitation yields mixed results in a Rhode Island case study.

In 1996, Harvard Pilgrim Health Care of New England (HPHC-NE) established six percent-of-premium arrangements with five Rhode Island PHOs. Each PHO received a percentage of the regional earned premium amounts for members who selected a primary care physician affiliated with it, adjusted for member demographics, benefit differences, and group size. Each of these six joint venture agreements also incorporated a per-member-per-month capitation fee. Despite improved communication between the PHOs and the plan and inpatient utilization reductions, all six joint ventures experienced losses beyond the withhold amounts during the first year of the arrangement. Factors affecting the medical utilization and financial results included market pressure on premium levels; risk pool size and adverse selection; and lack of timely, complete, and reliable financial and utilization data.

Capitation Fee↗

Participation in health promotion programs by the rural elderly.

The Health Care Financing Administration (HCFA) funded a series of demonstration programs to learn about the implications of extending coverage for disease prevention/health promotion services to Medicare beneficiaries. This article examines the use of such services by a rural population under this demonstration program. Individuals enrolled in the demonstration were eligible for specific risk reduction interventions. They were enrolled in one of two groups: (1) a hospital-based group in which hospitals were paid a capitated fee for providing all services and (2) a physician-based group in which physicians were paid fee-for-service for providing each service. Chi-square tests of association as well as logistic regression models were used to assess whether eligibility for services, and use of services by those eligible, varied by group and by sociodemographic characteristics. Forty-one percent were eligible for a nutrition program, 11% for smoking cessation, 2% for alcohol counseling, and 7% for dementia/depression evaluations. Participation in the programs varied across the programs and within programs by gender, education, and group assignment. Older rural Americans will use some disease prevention/health promotion services if they are covered by Medicare. Use will be higher among those with more education. Rural beneficiaries are more likely to use preventive services if encouraged to do so by their doctors rather than by hospital-based programs.

Aged↗

Evaluation of a health promotion demonstration program for the rural elderly.

OBJECTIVE: This article evaluates a demonstration program that extended coverage for disease prevention/health promotion services to Medicare beneficiaries. STUDY SETTING/DATA SOURCES: Community-dwelling Medicare beneficiaries who lived in five rural counties in northwest Pennsylvania were recruited between May and December 1989. The demonstration lasted 18 months and beneficiaries were followed for an additional 18 months. Data for the evaluation came from an initial health risk assessment, Medicare administrative records, follow-up surveys, and redeemed vouchers for the waivered services. The waivered services included health screenings, influenza immunization, nutritional counseling, smoking and alcohol cessation, and depression/dementia evaluations. STUDY DESIGN: Medicare beneficiaries were randomized to one of two experimental groups and a control group. One experimental group received the newly waived services from hospitals that received a capitated fee; the other received services from providers who were paid fee-for-service. Eligibility for most waivered services was based on risk. Chi-square tests of association were used to determine if use of health promotion services and use of medical care services varied across groups. Logistic regressions were used to assess the factors associated with participation. Product-limit survival analysis was used to assess whether mortality rates varied across groups. PRINCIPAL FINDINGS: Participation rates in the new programs varied by program and by experimental group, and ranged from 16.8 percent for smoking cessation programs to 58 percent for influenza immunization. The demonstration led to an increase in influenza immunization rates relative to the control group. There were no differences in the use of medical care services or health outcomes between the experimental and control groups. CONCLUSIONS: Older rural Americans will modestly increase their use of disease prevention/ health promotion services if they are covered by Medicare. Use will be higher among those with more education. Further research is needed to assess long-term benefits of such programs.

Activities of Daily Living↗

Capitation, salary, fee-for-service and mixed systems of payment: effects on the behaviour of primary care physicians.

BACKGROUND: It is widely believed that the method of payment of physicians may affect their clinical behaviour. Although payment systems may be used to achieve policy objectives (e.g. cost containment or improved quality of care), little is known about the effects of different payment systems in achieving these objectives. OBJECTIVES: To evaluate the impact of different methods of payment (capitation, salary, fee for service and mixed systems of payment) on the clinical behaviour of primary care physicians (PCPs). SEARCH STRATEGY: We searched the Cochrane Effective Practice and Organisation of Care Group specialised register; the Cochrane Controlled Trials Register; MEDLINE (1966 to October 1997); BIDS EMBASE (1980 to October 1997); BIDS ISI (1981 to October 1997); EconLit (1969 to October 1997); HealthStar (1975 to October 1997) Helmis (1984 to October 1997); health economics discussion paper series of the Universities of York, Aberdeen, Sheffield, Bristol, Brunel, and McMaster; Swedish Institute of Health Economics; RAND corporation; and reference lists of articles. SELECTION CRITERIA: Randomised trials, controlled before and after studies and interrupted time series analyses of interventions comparing the impact of capitation, salary, fee for service (FFS) and mixed systems of payment on primary care physician satisfaction with working environment; cost and quantity of care; type and pattern of care; equity of care; and patient health status and satisfaction. DATA COLLECTION AND ANALYSIS: Two reviewers independently extracted data and assessed study quality. MAIN RESULTS: Four studies were included involving 640 primary care physicians and more than 6400 patients. There was considerable variation in study setting and the range of outcomes measured. FFS resulted in more primary care visits/contacts, visits to specialists and diagnostic and curative services but fewer hospital referrals and repeat prescriptions compared with capitation. Compliance with a recommended number of visits was higher under FFS compared with capitation payment. FFS resulted in more patient visits, greater continuity of care, higher compliance with a recommended number of visits, but patients were less satisfied with access to their physician compared with salaried payment. REVIEWER'S CONCLUSIONS: It is noteworthy that so few studies met the inclusion criteria. There is some evidence to suggest that the method of payment of primary care physicians affects their behaviour, but the findings' generalisability is unknown. More evaluations of the effect of payment systems on PCP behaviour are needed, especially in terms of the relative impact of salary versus capitation payments.

Capitation Fee↗