Capitation v. fee-for-service--some practical answers.
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Capitated medical groups continue to earn more per physician and appear to be more productive in terms of relative value units than fee-for-service physicians, according to data from the American Medical Group Association's 2004 Medical Group Compensation & Financial Survey.
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The quality of dental care provided under a dual-choice dental plan was evaluated. Eleven practices, six capitation and five fee-for-service, were examined. The methodology was based primarily on examination of elements of structure and process of care. Samples of patient dental records were drawn from each practice for a total of 495 patient records. The results showed that none of the five fee-for-service dental practices and only two of the capitation practices were found to meet all the criteria for acceptable dental practice. Universally poor documentation made it extremely difficult to evaluate process measures of care. Fee-for-service patients received more visits and services than capitation patients. Overtreatment occurred in fee-for-service practices and undertreatment occurred in capitation practices. The distribution of services also differed, with capitation practices providing a less expensive type of service. Annual utilization of one or more services for capitation practices varied substantially by the practice. In this plan, both capitation and fee-for-service practices demonstrated a need for strong quality assurance mechanisms to protect the interests of patients.
BACKGROUND: This article examines the impact of capitated, or CAP, and fee-for-service, or FFS, dental benefit plans on the enrollees' satisfaction with their plans and their satisfaction with their dentists. METHODS: The authors selected four dental markets: California, New Jersey, Michigan and North Carolina. Eight Fortune 500 companies participated. Enrollees were selected randomly and interviewed about their experiences with their dental plans. The sample consisted of 2,340 respondents, of whom 42.3 percent were enrolled in CAP plans and 57.7 percent in FFS plans. RESULTS: The major findings were that those enrolled in FFS plans were four times more likely to be very satisfied than dissatisfied with their dental plans than were those in CAP plans. The FFS plan enrollees were 16 times more likely to be very satisfied than dissatisfied with their dentists than were those in CAP plans. CONCLUSION: Enrollees generally were satisfied with their plans and their dentists but those in FFS plans were the most satisfied. The higher the premium paid, the higher the level of satisfaction. PRACTICE IMPLICATIONS: Enrollees with perceived unmet needs were less satisfied with their dental benefit plans and dentists. Taking care of needs is the most significant thing dentists can do to affect patients' satisfaction.
Reimbursement strategies represent a key tool in implementing public policy. Often the relationship between changes in reimbursement policy and changes in provider behavior is difficult to predict, particularly in complex service systems. Here we present findings from a multiyear study involving the comparison of alternative Medicaid reimbursement systems for intensive case management services: a fee-for-service arrangement developed specifically for this study, and the partial capitation system in use in New York State. We focus on the impact of these two reimbursement schemes on the number and types of services provided by case managers and on client outcomes.
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OBJECTIVE: To determine the prevalence and severity of caries in children attending kindergartens in Amman and the relationship between caries experience and socio-demographic factors including age, social class based on the father's occupation, the level of mother's education and the fee level of the kindergarten attended. DESIGN: Cross sectional survey including a dental examination of the child and a questionnaire completed by the parents. SETTING: Kindergarten schools in Amman. PARTICIPANTS: 1,140 children including 569 4-year-olds and 571 5-year-olds. RESULTS: Prevalence of caries in 4 year olds was 62% and in 5 year olds it was 73%. The dmft values were 3.1 and 4.1 in 4 and 5 year olds respectively. Lower caries prevalence was recorded for children of families where the father had a non-manual occupation, those whose mothers had higher levels of educational attainment and for children attending kindergartens with higher tuition fees. CONCLUSION: Caries prevalence and severity in children attending kindergarten schools in Amman are similar to those seen in studies of children of the same age in Saudi Arabia and higher than those in children in westernised countries such as the UK. As in other countries, caries experience in young children in Amman is clearly related to social factors. Findings illustrate the need for effective oral health promotion accessible to all social groups in this middle eastern capital. Fee scale of the schools appears to be an effective measure to use in designing appropriate strategies.
This paper describes the experience of the two prepaid group practice plans in Ontario before and after universal health insurance. Both plans were capitalized, before national health insurance, by member contributions and both have had persistent problems with enrollment constraints and professional opposition. The Sault Ste. Marie Plan began in 1963, six years before Canadian medicare. The plan was paid a capitation fee for medical services but did not share in savings from its reduced hospital use. After universal insurance sharing in decreased hospital use was offset by regulations which allowed plan members to use non-plan physicians at Plan expense. Payments to non-plan physicians now take up 20 per cent of Plan income. Active enrollment of members has been replaced by a Ministry of Health registration system which is based on overall utilization. The St. Catharine's Plan began at the same time as universal insurance in 1969. Its out-of-plan use averaged about 40 per cent of total income. Most recently this program has shifted from capitation to cost-reimbursement payment. In Canada present trends include cost containment, financing by general tax revenues rather than premiums and increased categorical benefits. Under Canadian universal health insurance prepaid group practice has an uncertain future.
In 1986 more than 770,000 Medicare beneficiaries were enrolled in risk-based health plans that had very little experience in providing medical care to elderly patients. This article addresses one major facet of the National Medicare Competition Evaluation of capitated versus fee-for-service delivery of Medicare benefits, sponsored by the Health Care Financing Administration: the assessment of the quality of the process of care delivered to Medicare enrollees. The rationale, design, and analysis plans for this subpart of the larger evaluation and its interrelationships with the other components of the project are described.
German hospitals face growing economic pressure. Due to the reimbursement system with diagnosis-related groups (DRGs), revenues from capitation fees have to be earned by each clinic. This leads to minimization of resources for every single case. Cost effectiveness is also realised through shorter hospital stays, reduction of hospital beds and a steady rise in cases per year. As a consequence, all employees are confronted with an increasing workload. Compensation of these working conditions can be achieved by human engineering. Despite statements from politicians and hospital leadership in order to cope with this situation, reality is far away: overwork, shorter or missing recreation periods, pressure of time and low income of staff members have turned hospitals into a deterring workplace. If satisfaction of elementary needs such as adherence to break times, is not achieved shortly, politicians and hospital leadership will find out that without motivated and satisfied staff there will not be efficient performance. The present article addresses this issue and gives examples for increasing efficiency through motivation. Focus is on cooperation in the operation room, advantages and risks of teamwork and auxiliary measures for improvement. The aim is to underline how complex and fragile working in an operation room proceeds and how little is done to support this process. Finally, examples are described which improve teamwork, motivation, efficiency and efficacy.
The literature on physician-induced demand (PID) suffers from an inability to distinguish between the effect of better access and the effect of patient shortage. Data from the Norwegian capitation trial in general practice give us an opportunity to make this distinction and hence, study whether service provision by physicians is partly income-motivated. In the capitation trial, each general practitioner (GP) has a personal list of patients. The payment system is a mix of a capitation fee and a fee for service. The data set has information on patient shortage, i.e. a positive difference between a GP's preferred and actual list size, at the individual practice level. From a model of a GP's optimal choice we derive the GP's optimal practice profile contingent on whether the GP experiences a shortage of patients or not. To what extent GPs, who experience a shortage, will undertake measures to attract patients or embark on a service-intensive practice style depends on the costs of the various measures relative to their expected benefit. The model classifies GPs into five types. In the empirical analysis a panel of GPs is followed for 5 years. Hence, transitory effects should have been exhausted. We show that GPs who experience a shortage of patients have a higher income per listed person than their unrationed colleagues.
The present paper aims at giving a short overview of the organization and financing of the Danish health care system as of 1997-1998 when the SWOT panel evaluated the system. The overview follows the triangular model of a health care system. The Danish system is characterized by being decentralized and single-funded. The hospital sector is public, and hospitals are financed and run by the counties (with only a very small private hospital sector alongside). General practitioners are private entrepreneurs but work under contract for the counties. Hospitals are financed by global budgets, while general practitioners are paid by a mixed remuneration system of capitation fees and fee-for-service. During the past 20 years, the government has repeatedly imposed budget ceilings on the counties which has limited growth in the health care sector.
The organization and financing of the Danish health care system was evaluated within the framework of a SWOT analysis (analysis of strengths, weaknesses, opportunities and threats) by a panel of five members with a background in health economics. The evaluation was based on reading an extensive amount of selected documents and literature on the Danish health care system and a 1-week visit to health care authorities, providers and key persons. The present paper includes the main findings by one of the panel members. Primary care is much more accessible in Denmark than the USA. A mixed capitation-fee-for-service method of paying generalist physicians in Denmark ensures that everyone has a primary care physician and generalist physicians are responsive to providing services quickly, typically same-day appointments. An organized off-hours service ensures accessible care 24 h a day, 7 days a week. Denmark has the highest public satisfaction with health care, reflecting the value placed on accessibility of primary care. Inpatient hospital care consumes a disproportionate share of Danish health expenditures. Global hospital budgets provide little incentive for hospital or surgical productivity. Long waits for hospitalization, especially surgical procedures and cancellation of scheduled surgery, are a source of patient dissatisfaction. Women's health, patient health risk counseling and coordination of preventive and primary care are major weaknesses of the Danish health system. Patients have a choice of primary care physician within a given geographic area and may go to a hospital of their choice. However, patient surveys and feedback are underdeveloped and very little effort has been made to make services responsive to patients' preferences. While innovations in electronic prescribing are noteworthy, further development of health information technology is needed.
STUDY OBJECTIVE: The aim was to compare the ability of census based social deprivation scores devised by Jarman, Carstairs, and Townsend to predict workload in general practice. DESIGN: This was a prospective study of 140,050 patients registered with general practices over one year from 1 July 1981 (Third National Morbidity Survey). Main outcome measures were workload score for each patient, defined as a weighted sum of consultations at the surgery and consultations elsewhere, excluding preventive procedures. SETTING: 25 general practices in England and Wales. MAIN RESULTS: In multivariate analyses the Jarman, Carstairs, and Townsend indices all predicted workload, but the Townsend index was the best predictor, with both housing tenure and car ownership being strong predictors of workload. The overcrowding and geographical mobility variables used in the Jarman index did not predict increased workload. The weighting assigned to children under five by the Jarman index underestimated the additional workload this group generated. CONCLUSIONS: For identifying social pressures on general practice workload the Jarman index is less valid than other census based scores because it fails to include car ownership and housing tenure. A more rational scheme for compensating general practitioners would directly weight the capitation fee for children aged under five years and allocate current deprivation payments according to the Townsend index or a similar score. This would redistribute resources from London to deprived areas in northern England.
General practice is one of the three bases of care in the British National Health Service (NHS); the other two are hospital and community services. Each is administered separately. There are 30,000 general practitioners (for a population of 57 million), who are independent and can organize their work as they see fit. Few are single-handed (13 percent) and the majority work in groups of three to five physicians. They are paid by capitation fees, and fees for specific services, and also receive reimbursements for staff, premises rental, and local taxes (rates). They work in close association with practice teams that include nurses, midwives, and social workers. There are no universal hospital privileges but many general practitioners hold appointments in local hospitals. Important trends in the NHS include mandatory vocational training of general practitioners for three years; the growing importance of attempts by the Royal College of General Practitioners to shift care from the hospital to the community; increased patient participation; clashes between the government and the medical profession over restricted funding of the NHS; definition and improvement of "quality," and a need for improved data collection; and long waits for hospital services.