Biomaterial Database

Prepaid capitation versus fee-for-service reimbursement in a Medicaid population. 1997

J T Badgett, and G P Rabalais

University Child Health Specialists, Louisville, KY 40203, USA.

Utilization of health resources by 37,444 Medicaid recipients enrolled in a capitated health maintenance organization was compared with that of 227,242 Medicaid recipients enrolled in a traditional fee-for-service system over a 1-year period (1983-1984) in the state of Kentucky. Primary care providers in the capitated program had financial incentives to reduce downstream costs like specialist referral, emergency room use, and hospitalizations. The average number of physician visits was similar for both groups (4.47/year in the capitated program; 5.09/year in the fee-for-service system). However, the average number of prescriptions (1.9 versus 4.9 per year), average number of hospital admissions per recipient (0.11 versus 0.22 per year), and average number of hospital days per 1,000 recipients (461 versus 909 per year) were 5% to 60% lower in the capitated group than in the fee-for-service group. The Citicare capitated program resulted in a dramatic reduction in healthcare resource utilization compared with the concurrent fee-for-service system for statewide Medicaid recipients.

UI	MeSH Term	Description	Entries
D007629	Kentucky	A state bounded on the north by Illinois, Indiana, and Ohio; on the east by Virginia and west Virginia; on the south by Tennessee, and on the west by Missouri.
D008329	Managed Care Programs	Health insurance plans intended to reduce unnecessary health care costs through a variety of mechanisms, including: economic incentives for physicians and patients to select less costly forms of care; programs for reviewing the medical necessity of specific services; increased beneficiary cost sharing; controls on inpatient admissions and lengths of stay; the establishment of cost-sharing incentives for outpatient surgery; selective contracting with health care providers; and the intensive management of high-cost health care cases. The programs may be provided in a variety of settings, such as HEALTH MAINTENANCE ORGANIZATIONS and PREFERRED PROVIDER ORGANIZATIONS.	Case Management, Insurance,Insurance Case Management,Managed Health Care Insurance Plans,Managed Care,Care, Managed,Managed Care Program,Management, Insurance Case,Program, Managed Care,Programs, Managed Care
D008484	Medicaid	Federal program, created by Public Law 89-97, Title XIX, a 1965 amendment to the Social Security Act, administered by the states, that provides health care benefits to indigent and medically indigent persons.	Dental Medicaid Program,Medical Assistance, Title 19,Dental Medicaid Programs,Medicaid Program, Dental,Medicaid Programs, Dental,Program, Dental Medicaid,Programs, Dental Medicaid
D012051	Reimbursement Mechanisms	Processes or methods of reimbursement for services rendered or equipment.	Mechanism, Reimbursement,Mechanisms, Reimbursement,Reimbursement Mechanism
D002204	Capitation Fee	A method of payment for health services in which an individual or institutional provider is paid a fixed, per capita amount without regard to the actual number or nature of services provided to each patient.	Fee, Capitation,Capitation Fees,Fees, Capitation
D006295	Health Resources	Available manpower, facilities, revenue, equipment, and supplies to produce requisite health care and services.	Resources,Health Resource,Resource,Resource, Health,Resources, Health
D000385	Aid to Families with Dependent Children	Financial assistance provided by the government to indigent families with dependent children who meet certain requirements as defined by the Social Security Act, Title IV, in the U.S.	Family Allowances,Allowance, Family,Allowances, Family,Family Allowance
D013221	State Health Plans	State plans prepared by the State Health Planning and Development Agencies which are made up from plans submitted by the Health Systems Agencies and subject to review and revision by the Statewide Health Coordinating Council.	Comprehensive Health Plans, State,Health Plan, State,Health Plans, State,Plan, State Health,Plans, State Health,State Health Plan
D014481	United States	A country in NORTH AMERICA between CANADA and MEXICO.
D017061	Prepaid Health Plans	Contracts between an insurer and a subscriber or a group of subscribers whereby a specified set of health benefits is provided in return for a periodic premium.	Health Plans, Prepaid,Health Plan, Prepaid,Plan, Prepaid Health,Plans, Prepaid Health,Prepaid Health Plan