Risk adjustment of capitation payments to behavioral health care carve-outs: how well do existing methodologies account for psychiatric disability?

Published: February 1, 2000
Category: Bibliography > Papers
Authors: Ettner SL, Frank RG, Mark T, Smith MW
Countries: United States
Language: null
Types: Care Management, Population Health
Settings: Academic, Hospital

Health Care Manag Sci 3:159-169.

Division of General Internal Medicine and Health Services Research, UCLA Department of Medicine, Los Angeles, CA, USA

This study used 1994-1995 administrative data from a large public employer to examine the viability of commercial risk adjustment systems for setting capitation payments to competing behavioral health care “carve-outs”. The ability of Hierarchical Condition Categories and Adjusted Diagnostic Groups to predict psychiatric expenditures was improved by controlling separately for psychiatric disability. However, even the best models underpredicted expenditures of patients with psychiatric disability by 15%. Relative to full capitation, “mixed” payment systems and soft capitation reduce the ability of carve-outs to earn disproportionate profits by enrolling healthy patients and avoiding sick ones, yet also diminish incentives for cost containment.

PMID: 10780284

Capitation,Payment,Medical Conditions,United States,Adult,Diagnosis-Related Groups/economics,Gender,Insurance Selection Bias,Middle Aged,New England,Reproducibility of Results

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