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PubMed1994

Risk-adjusted capitation: recent experiences in The Netherlands.

The market-oriented health care reforms taking place in the Netherlands show a clear resemblance to the proposals for managed competition in U.S. health care. In both countries good risk adjustment mechanisms that prevent cream skimming--that is, that prevent plans from selecting the best health risks--are critical to the success of the reforms. In this paper we present an overview of the Dutch reforms and of our research concerning risk-adjusted capitation payments. Although we are optimistic about the technical possibilities for solving the problem of cream skimming, the implementation of good risk-adjusted capitation is a long-term challenge.

Capitation Fee↗
PubMed1995

A capitated payment system for involuntary mental health clients.

This DataWatch examines an outpatient capitated payment system, in the state of Oregon, designed to enhance community services for persons with chronic mental illness who had repeatedly been hospitalized involuntarily. Special state funds and Medicaid dollars were used to pay providers prospectively on a risk-adjusted basis for the delivery of outpatient mental health services. During the three-year study period clients were able to be discharged from the state hospital. Although the data are not straightforward, capitated clients' use of the state mental hospital seems to have declined somewhat more than that of comparison subjects. Outpatient service use was modest and appeared to have little relationship to a client's level of illness severity. Indeed, it was not possible to predict prospectively these clients' outpatient mental health services expenditures.

Capitation Fee↗
PubMedDate not supplied

Medicaid managed care payment methods and capitation rates in 2001.

We present results from a survey of Medicaid managed care payment methods and rates in 2001 for AFDC/TANF and poverty-related Medicaid populations, updating a similar survey of 1998 rates. Rates were adjusted for differences in age-sex groupings, maternity payments, and service carve-outs. A twofold variation in Medicaid capitation rates remains, although there was a change in the composition of states at the top and bottom. The data also show that the growth in Medicaid capitation rates between 1998 and 2001 averaged 18 percent, considerably more than the increase in Medicare+Choice rates.

Actuarial Analysis↗
PubMed1988

Capitation and fee-for-service dental benefit plans: economic incentives, utilization, and service-mix.

Insurance carriers, corporations, and labor groups are actively developing and marketing dental capitation benefit plans. Incentives to both dentists and patients in these plans differ from those in the traditional fee-for-service system used with conventional benefit plans. This paper describes the likely effects of these incentive differences on utilization and service-mix patterns in both systems. Data for a large (approximately 10,000), homogenous group of subscribers are presented and discussed. Faced with a dual option, at no cost to the employee, 60% of the subscribers chose the fee-for-service plan, and 40% chose the capitation plan. Observed differences in the utilization and mix of services between the two plans cannot be explained solely in terms of dentists' responses. Employee response to altered economic incentives appears to be strong.

Capitation Fee↗
PubMedDate not supplied

[Prospects of adjusted clinical groups (ACG's) in capitated payment risk adjustment].

BACKGROUND: Most patient classification systems have been designed in the United States for the purpose of availing of a tool providing a means of gauging the use of resources. This study was aimed at calculating the mean relative weights (MRW's) for the cost of care at several primary care health facilities as compared to those in the U.S. by using the Adjusted Clinical Groups (ACG's) as a possible capitated payment risk adjustment. METHODS: Descriptive study. All of the clinical records generated by four primary care facilities throughout 2003 were included. The main measurements were: age and gender, resources (visits and costs) and casuistics. The cost model was determined for each individual patient by differentiating the fixed and variable costs. A regression analysis was made for model adjustment purposes. The relative cost of each ACG was calculated by dividing the mean cost of each category by the mean cost of the population as a whole. RESULTS: A total of 62,311 records were studied, revealing an average of 4.8 +/- 3.2 diagnoses and 7.8 +/- 7.5 visits/patient/year. The total expense was 24.1 million euros, the fixed and semi-fixed costs totaling 28.9% and the variable costs 71.1%. The mean total cost/patient/year was 387.34 +/- 145.87? (reference). The adjusted explicative power of the cost of care between the two classifications (U.S. classification vs. the one studied) was 64.3%; p = 0.000). CONCLUSIONS: The generalization of the results must be carefully construed. ACG's show themselves to be a suitable tool, and the mean U.S. RW's could be used for adjusting capitated payment risk adjustments in view of the difficulty of availing of full, consistent databases in our environment. Further research would be required to back up the consistency of the results.

Adolescent↗
PubMed2004

Utilization of orthopaedic services for hand and wrist conditions in a capitated population.

BACKGROUND: The utilization of orthopaedic services (office visits and surgery) to treat hand and wrist conditions is not well known. In this study, we report the utilization rates for patients referred for orthopaedic treatment of hand and wrist conditions in a large population of individuals enrolled in a capitated insurance plan. METHODS: The study population consisted of individuals enrolled, between January 1998 and December 2001, in a capitated insurance plan that had an annual average membership of 135,188 during that period. 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 in a centralized database as patients with various hand or wrist conditions were referred for orthopaedic services. Odds ratios were used to compare gender-specific and age-specific utilization rates. RESULTS: Overall utilization rates were 18.06 office visits and 6.47 surgical procedures per 1000 members per year. The most frequent hand or wrist conditions were fractures, carpal tunnel syndrome, tendinitis or tenosynovitis, and ganglion or synovial cysts. These four diagnoses accounted for 70% of all office visits and 71% of all surgical cases. Across all age groups, males had a significantly higher rate of utilization of office visits (p < 0.001). Between the ages of thirty-five and fifty-five years, utilization of office visits and surgery increased approximately linearly with age. CONCLUSIONS: A comparison of these data with those of previous reports indicates that approximately one of every ten patients who are referred for orthopaedic services has a hand or wrist condition, and nearly half will require surgery.

Adolescent↗
PubMed2001

Capitation and primary care in Canada: financial incentives and the evolution of health service organizations.

Alternative approaches to the funding, organization, and delivery of primary care have been the subject of ongoing discussion and debate in many industrialized nations for many years. One common recommendation has been to use capitation, as opposed to fee-for-service, as the payment method for physicians. In this study the authors use data from interviews with physicians and Ministry of Health officials to trace the evolution of Ontario's Health Service Organization (HSO) program, the only program of capitation-funded physician care in Canada. The program has developed in three phases: formation in the early 1970s, expansion in the late 1970s and throughout the 1980s, and restructuring in the 1990s. The analysis focuses on the perceptions and actions of policymakers and physicians who became involved with the program at different points in its evolution, and identifies how they perceived and responded to the financial incentives that were introduced to promote the program. This case study allows an examination of the shifting objectives, communications, perceptions, and responses of policymakers and stakeholders in changing contexts over a period of more than 20 years. The long history of the HSO program provides the opportunity to examine the factors that can cause financial incentives to go awry. The authors suggest how this case study offers lessons for financial incentive policymaking.

Attitude of Health Personnel↗
PubMed1986

Risk factors for hospitalization and surgery in patients with rheumatoid arthritis: implications for capitated medical payment.

Risk factors for hospitalization in patients with rheumatoid arthritis were analyzed to determine if factors proposed for use in adjusting Medicare capitation payments to prepaid health plans are, in fact, associated with use of costly medical care for this illness. Participating physicians from a random sample of half the rheumatologists in northern California provided us with the names of all patients with rheumatoid arthritis presenting during a 1-month period. We surveyed 754 (89%) of these patients in both 1982-83 and 1984 to obtain information about health care use in the previous 12 months. We found that baseline functional status and prior-year admissions (proposed Medicare adjustment factors), as well as disease-specific severity measures, predicted subsequent admissions. The association of prior with subsequent admissions was independent of disease severity and physician characteristics. Adjusting capitation payments for both health status and prior use will increase incentives for prepaid health plans to enroll patients with rheumatoid arthritis who have high expected medical costs.

Arthritis, Rheumatoid↗
PubMed1994

The effects of capitation on health and functional status of the Medicaid elderly. A randomized trial.

PURPOSE: To determine the effect on health and functional status outcomes of enrollment of noninstitutionalized elderly Medicaid recipients in prepaid plans compared with traditional fee-for-service Medicaid. DESIGN: A randomized controlled trial. Beneficiaries were randomly assigned to prepaid care in one of seven capitated health plans compared with fee-for-service care. Only the Medicaid portion of their care was capitated. Patients were followed for 1 year. SETTING: The Medicaid Demonstration Project in Hennepin County, Minnesota, which includes Minneapolis. PATIENTS: 800 Medicaid beneficiaries who were 65 years or older at the beginning of the evaluation. Beneficiaries were interviewed at baseline (time 1) and 1 year later (time 2). Ninety-six percent of beneficiaries were available for follow-up interviews at time 2. MAIN OUTCOME MEASURES: General health status, physical functioning, mental health status, activities of daily living, instrumental activities of daily living, corrected visual acuity, and blood pressure and glycosylated hemoglobin measurements for hypertensive and diabetic persons, respectively. RESULTS: There were no differences between prepaid and fee-for-service groups in the number of deaths (20 compared with 24, P > 0.2), the proportion in fair or poor health (56.5% compared with 59.7%, P > 0.2), physical functioning, activities of daily living, visual acuity, or blood pressure or diabetic control. Patients in the prepaid group reported a trend toward better general health rating scores (10.2 compared with 9.8, P = 0.06) and well-being scores (10.0 compared with 9.7, P = 0.07) than patients in the fee-for-service group. The difference in the likelihood of a patient in the prepaid group having a physician visit relative to the fee-for-service group was -16.5% (adjusted odds ratio, 0.46; 95% CI, 0.29 to 0.74) and for an inpatient visit was -11.2% (adjusted odds ratio, 0.55; CI, 0.32 to 0.94). CONCLUSIONS: There was no evidence of harmful effects of enrolling elderly Medicaid patients in prepaid plans, at least in the short run. Whether these findings also apply to settings in which health maintenance organizations are formed exclusively for Medicaid patients should be studied further.

Activities of Daily Living↗
PubMed1999

Specialty contact capitation.

Contact capitation is an emerging new payment method for risk contracts that aligns incentives among physicians, protects individual physicians from their colleagues' less efficient practice patterns, and allows physicians to share in the rewards of their own clinical effectiveness. Contact capitation is working in a variety of settings and developing a track record as a payment method to help ailing independent physician associations, physician-hospital organizations, health plans, and other risk-bearing entities.

Capitation Fee↗
PubMed1990

Removal of obsolete regulations on limitation on federal participation for capital expenditures under Section 1122 of the Social Security Act--HCFA. Final rule.

This rule removes obsolete regulations governing the section 1122 capital expenditures review program. With the repeal of the comprehensive health planning authority, Title XV of the Public Health Service (PHS) Act, no funds were appropriated to support State capital expenditure review activities, or to administer the program.

Capital Expenditures↗
PubMed1990

Using Monte Carlo simulation to make better capital investment decisions.

The financial analysis of a proposed capital investment typically involves estimating the project's expected cash flows and profitability and then perhaps looking at one or two alternative scenarios. However, this procedure provides incomplete information about a project's potential risk/return characteristics because it focuses on only a few possibilities; whereas, real-world investments can have an almost unlimited number of financial outcomes. Monte Carlo simulation can solve the incomplete information problem. In a Monte Carlo simulation, relatively certain input variables are specified by single values, while relatively uncertain variables are specified by probability distributions. The end result is a probability distribution that describes the project's full range of potential profitability. With a complete set of information concerning a project's risk/return characteristics, decision makers can better judge the financial impact of the investment and hence make better capital investment decisions.

Capital Expenditures↗
PubMed1991

Capital rule to put reins on hospital spending.

In an effort to get an even tighter hold on rising medical costs, the Health Care Financing Administration has proposed a new Capital Rule for reimbursement of capital expenses under Medicare. It would replace the existing cost-base system with a prospective payment structure. But how are hospitals adjusting to the proposed rule which will go into effect Oct. 1, 1991? The following article examines the preliminary reactions of administrators across the country.

Capital Expenditures↗
PubMed1990

Setting capitations for Medicaid: a case study.

This article examines the methodology New York State used to set capitation rates for a Medicaid health maintenance organization. By examining the methods used and the assumptions made in a particular case, some general lessons are drawn about the ratesetting process. Greater reliance on statewide data to assure fair and statistically stable estimates is needed. Although the article focuses on one State and its ratesetting for one particular plan (Health Care Plus), the issues raised have general interest for other plans and for other States concerned with the setting of capitation rates for Medicaid enrollees in prepaid plans.

Capitation Fee↗
PubMed1992

The departmental capital plan.

The capital budget process can be a long and time-consuming process. However, if the proper amount of effort is expended, a positive result can be achieved. This can lead to departmental and personal pride, not to mention efficiencies for the department and the hospital. With the proper capital additions in place, the hospital can go about its true business of delivering quality medical care.

Budgets↗
PubMed1992

Medicare program; prospective payment system for inpatient hospital capital-related costs; correction--HCFA. Final rule; correction.

In the August 30, 1991 issue of the Federal Register (FR Doc. 91-20779) (56 FR 43358), we revised the Medicare payment methodology for inpatient hospital capital-related costs for hospitals paid under the prospective payment system. We replaced the reasonable cost-based payment methodology with a prospective payment methodology for capital-related costs. This notice corrects errors made in that document.

Capital Expenditures↗
PubMed1992

Relaxed capital PPS rules are expected.

Hospital chief financial officers frustrated over some of the rules implementing last year's Medicare capital payment regulations may get some relief soon. HCFA's annual PPS regulations, expected to be released as early as later this month, will include a softening--or at least clarification--of some of the capital rules CFOs consider too harsh or onerous, one top HCFA official said.

Capital Expenditures↗
PubMedDate not supplied

Hospital capital funding.

It is critical that hospitals have a long-range plan in place to ensure that buildings and equipment are replaced when necessary. A study undertaken in British Columbia contrasted the Greater Vancouver Regional Hospital District's capital plan (past and future) to a proposed capital replacement model. The model, developed using accepted industry standards and criteria, provided an asset value that was used for comparison purposes. Building and equipment expenditures of the Surrey Memorial Hospital were also compared against the model. Findings from both studies are presented in this article.

Canada↗