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PubMed1995

Agency theory: a framework for analyzing physician services.

The principles of agency theory and how the theory can be used as a framework for the design of physician selection procedures and of physician compensation contracts and control systems for the regulation of physician practices are discussed. The theory is used to show why third party payers who wish to control expenditure for high quality health care may be better off if they enter into salary contracts rather than fee-for-service or capitation contracts with individual physicians.

Capitation Fee↗
PubMedDate not supplied

[Different forms of payment systems for dental services and their impact on care].

The Brazilian dental care sector is facing a paradoxical crisis characterized by a surplus of dentists and a large contingent of people lacking dental care, thus highlighting the need to improve management strategies. One necessary step is to analyze the various payment schemes for dental services. This paper reviews two important approaches, fee for service and capitation, and considers the impacts and consequences of payment strategies on the dental care system.

Capitation Fee↗
PubMedDate not supplied

The Rochester Consortium.

The laboratories of the six hospitals in Rochester, New York worked together to bid on laboratory services for local managed-care contracts. Their primary goal was to keep shrinking health-care dollars in the Rochester community while providing quality laboratory services for managed-care payers. The six laboratory providers formed a cooperative Consortium that enabled them to compete successfully with national commercial laboratories for referral laboratory testing for outpatients and nonpatients. In 1995, the Consortium was approached by a Rochester-based health maintenance organization (HMO) offering an exclusive contract opportunity based on requirements that included cost reduction and a switch from a fee schedule to a capitated payment method. The Rochester laboratories each agreed to contract terms with the HMO, then followed this success by working with a second, significantly larger HMO, agreeing to provide exclusive laboratory services under a similar, capitated arrangement. The formation and work of the Consortium may provide other hospitals facing daunting competition from large commercial laboratory enterprises with a cooperative arrangement model to provide community-wide laboratory services.

Capitation Fee↗
PubMed1998

Utilization management in a mixed-payment environment.

Fee-for-service and capitation payment methods create different financial incentives for healthcare providers, and the objectives of utilization management differ under each payment method. These differences can be reconciled, however, by incorporating the strengths of utilization management programs associated with both methods into an overarching program that focuses on the continuum of care. Such a program should be focused on achieving the optimal outcomes for patients by identifying the appropriate level of care, who should provide it, and when and where it should be provided. Essential to this effort is access to comprehensive clinical and financial data through an integrated information system. In addition, financial incentives need to be aligned through such means as risk pools, compensation arrangements tied to achievement of medical management goals, and clearly defined policies and procedures.

Capitation Fee↗
PubMed1995

Practicing pathology as a health care contractor. Business planning for managed care.

Managed care requires a pathology practice to take on the role of a health care contractor whose existence depends on obtaining, managing, and renewing competitively bid contracts for the group's services. This presentation is a primer on how to write a formal business plan for a pathology practice using a model case study to illustrate, among several business issues, the differences between and the key elements for success in operating a pathology practice in both fee-for-service and capitated managed care environments.

Capitation Fee↗
PubMed2007

Caregivers' ratings of access: do children with special health care needs fare better under fee-for-service or partially capitated managed care?

OBJECTIVE: The objective of this study was to evaluate how enrollment in a partially capitated managed care (MC) option versus the fee-for-service (FFS) system affects caregivers' ratings of dimensions of access to services among children with special health care needs (SHCN). SUBJECTS: The data were collected from telephone interviews during the summer and fall of 2002 with a random sample of 1088 caregivers of children with SHCN who qualified for Supplemental Security Income and therefore were enrolled the Medicaid program for children with SHCN in the District of Columbia. RESEARCH DESIGN: We used a 2-step procedure in which we first estimated plan choice and then constructed a selectivity correction to control for the potential selection bias linked to plan choice. We estimated the second stage equations predicting caregiver's ratings of dimensions of access as a function of the selectivity correction, the plan choice dummy variable and other exogenous variables. RESULTS: After controlling for the potential selection bias linked to plan choice and other confounding factors, we find that caregivers of children in FFS are significantly more likely than caregivers of children enrolled in the partially capitated MC plan to rate the following dimensions of access as either fair or poor: "access to specialists' care" (P < 0.01), "access to emergency room care" (P < 0.01), "convenience of the doctor's office" (P < 0.01), and "waiting time between making the appointment actual visit" (P < 0.05). CONCLUSIONS: We attribute these differences in caregivers' ratings of dimensions of access that exist between partially capitated MC and FFS enrollees to case management and care coordination services along with higher fees paid for pediatrician's and specialists' services available under MC option.

Capitation Fee↗
PubMed1998

A proposed framework for economic evaluation of telemedicine.

Economic evaluation of telemedicine compares the costs and other consequences of delivering specific services through telemedicine vs. alternative means. Cost-effectiveness analysis, the most common method used for health issues, helps to assess whether the expected health benefits are worth the investment. Telemedicine raises particular challenges for evaluators: a telemedicine system may have multiple uses and joint costs that are difficult to apportion to one service, the existence of a system may lead to expanded indications for use, and technological change may rapidly make an evaluation outdated. Public and private regulation and payment may affect the diffusion of telemedicine. Uncertainty surrounds the policy of the U.S. Food and Drug Administration, which is still formulating its position. Changes are underway in policies on licensure and credentialing of clinicians, which have traditionally been done by state and by site, to reflect the fact that telemedicine services may cross these regional boundaries. Lack of insurance coverage for telemedicine services has been considered an impediment to adoption with fee-for-service payment. Under capitation payment and fixed budgets, however, providers have financial incentives to use the most efficient method to deliver services, and these arrangements would favor telemedicine if it is the less costly alternative. If telemedicine were most costly and the health benefits worth the cost, monitoring might be needed to ensure the quality of care.

Capitation Fee↗
PubMed1995

Fee-for-data: a strategy to open the HMO black box.

This paper outlines a simple proposal to maintain utilization data in the face of managed care growth. Health maintenance organizations (HMOs) would be required to submit claims (encounter-level data) and in return would be paid a percentage of what Medicare would pay fee-for-service providers. The capitation payment rate would be lowered to maintain budget-neutrality. This proposal would enable the collection of key data that might not otherwise be captured in a Medicare program dominated by HMOs and other forms of managed care. The data are necessary to drive Medicare policies and to gauge the impact of changes to the program. The program would be well advised to make the small additional investment to make the data system complete. The key issue in implementing such a proposal will be HMOs' ability to generate those data at reasonable cost.

Capitation Fee↗
PubMed1997

Assessing the impact of open-access HMOs on providers.

Open-access model HMOs, in which HMO members may seek specialty care without having to be referred by a primary care physician, have been hailed as the next major growth area for the managed care industry. This model is attractive to HMO members because it offers greater freedom in selecting and accessing providers. Payment mechanisms, though, tend to differ from those used by traditional gatekeeper model HMOs. The preferred method of payment in most open-access HMOs is to reimburse primary care physicians on a fee-for-service basis and capitate specialists. Open-access HMOs may lead to more restrictions for providers however, and their continued growth could lead to less desirable payment arrangements and weaker market positions. What types of payment and care delivery systems will ultimately result from open-access HMOs remain to be seen.

Capitation Fee↗
PubMed2000

Aligning physician financial incentives in a mixed-payment environment.

Under a shadow-pricing approach to physician compensation, physicians who deliver healthcare services to a mix of fee-for-service (FFS) and capitated patients are compensated for services via a payment schedule that treats all patients as if they were capitated. By encouraging physicians to adopt the same care-management approach for all patients, shadow pricing helps a group practice prepare for a larger share of revenues to be derived from capitation, thereby making the organization more attractive to many managed care payers. An apparent drawback of shadow pricing is that it gives physicians an incentive to reduce FFS utilization, resulting in a loss of potential revenue to the healthcare organization. This loss can be strategically justified, however, as an investment in the organization's ability to remain viable under capitation and to retain patients for whom payment may shift from FFS to capitation. In developing a shadow-pricing compensation approach, healthcare organizations can include incentives that encourage physicians to meet specific utilization targets, establish review procedures to identify physicians who deviate from the targets, and account for differences in acuity levels among different physicians' patient panels.

Accounts Payable and Receivable↗
PubMed1994

How should managed care physicians be paid?

When paying a physician for medical or surgical services, most patients expect the traditional bill or charge for that encounter or visit. While most people also pay health insurance premiums, few patients expect to prepay for their health care. But that is the foundation of most managed health care systems-prepaid medicine. PPOs, IPAs, and HMOs are typically health care providers linked together to provide services to a set population for a specific prepaid fee or "capitation" payment. Other providers contract with these managed care insurers to receive a predetermined and often "discounted" professional fee for services. These managed care organizations have already gone through a number of stages in determining how physicians are to be compensated for their services, and further changes loom on the horizon.

Capitation Fee↗