Perspectives of Physician Payment under Capitation
This web document is designed to give the web surfer background knowledge relating to physician payment within the managed care setting. Currently, the most popular form of physician reimbursement in managed care is the capitated arrangement whereby a physician is given a set amount of money that is based on their enrolled membership rather than services rendered which was the case under traditional indemnity insurance. The following links to web sites offer varying perspectives concerning the economic, political, and health aspects surrounding the capitated payment methodology.
 

 1. American Medical Specialty Organization

This site has a dedicated capitatation page that highlights the financial arrangement between the physician and managed care organization. Since the American Medical Specialty Organization is a physician trade group, the site provides a perspective from the physician’s point of view regarding the incentives and drawbacks of the capitated arrangement on the delivery of health care services to the consumer. The dedicated capitation page is a sounding board for individuals to post their experiences with capitation and discuss some adjustments and other mechanisms that would strengthen the current financial arrangement between the provider and managed care organization. Although the majority of information is subjective and biased, it does provide significant evidence concerning the current atmosphere that is not always readily available from so-called objective sources.

 

Rating: « « « out of five.

 

2. General Government Accounting Office (G.A.O.)

 

The General Accounting Office is the investigative arm of Congress that examines matters relating to the receipt and disbursement of public funds. The GAO performs audits and evaluations of Government programs and activities. Therefore, it becomes an important objective research source for the study of the current payment incentives within managed care. Since the federal government is perhaps the largest single health payor in the nation, the GAO has conducted a number studies concerning the Medicare population and Health Maintenance Organizations.

Although the focus of the most prominent study focuses on the Medicare system as it phases many of its beneficiaries into managed care, one vital component of the study analyzes how the government’s Medicare Managed Care system can adopt various risk adjustments for it capitated rate payment system. This is currently a problem since inherent rate-setting flaws exist in the current system whereby the HMO capitated payment does not accurately adjust for a Medicare beneficiaries’ health or sickness level. This is also a problem in the private sector where individual providers are not receiving adequate compensation for their patient population from the Managed Care entities. Results and findings from the G.A.O. can assist in the development of a more comprehensive system in both the private sector as it relates to employer sponsored health plans as well as the government’s public Medicare program.

 

Rating: « « « « 1/2 out of five.

 

3. Managed Care Magazine

 This is an excellent site for any individual concerned with any aspect of the current managed care environment. The site is well-formatted, easy to navigate, and full of recent information regarding issues that impact policy makers, professionals, and politicians within the health care arena. With respect to physician payment methodology, and in particular capitation, the site offers several editorials that concentrate on the growth of capitation among the nation’s health plans, how the practice varies with the size of the practice, and what the future will hold for physicians and managed care companies under this current form of payment. The strength of the site is the content which explores the subject matter from the viewpoints of the physician, health care administrator, and business entity. It does not get mired in redundant information. Instead, it offers a fresh outlook of the situation as it impacts professionals in the field and legislators. The site also does a marvelous job at giving the web researcher a broad perspective of the managed care environment. Most articles on the home page were only days old and enabled the researcher to access the full text of any article on the site without a registration fee or sign-up process. This site is definitely worthy of a visit from anyone even remotely interested in the managed care environment. It is also worthy of one of the highest web-site ratings.

 

Rating: « « « « « out of five.

 

4. Health Care Finance Administration

Most governmental web-sites are organized and contain a wealth of information. The site of the Health Care Finance Administration (H.C.F.A.) is no exception. The Health Care Finance Administration is the executive arm of the government primarily concerned with administering and overseeing the rules and considerations within the government’s Medicare program. However, since the Medicare program is adopting the managed care approach to the delivery of health care, the site is a valuable resource for the investigation of the physician payment methodology under the managed care setting. It gives valuable insight into the government’s current project with managed care and how it currently arranges the fee-setting arrangements within the bidding process for managed care contracts.

 

5.   Association of Independent Hospitals

 

The Association of Independent Hospitals is a network of organizations committed to local, state, and regional efforts to promote cost effective, quality healthcare services, and to improve the overall health status of the patients they serve.

The site describes the organization’s main objective and project: a computer simulation based on a hypothetical hospital in an urban region with two competitors of about equal size. The model reflects three patient populations: fee-for-service, managed care (contracted with external HMOs, POs, and other organizations), and capitated care in which the hospital and at least part of its medical staff are "at risk" in providing care for a fixed premium.

Although the site is designed to assist the physician navigate within the maze that managed care creates with respect to reimbursement mechanisms, the site is very informative and analytical. Additionally, navigation within the site is extremely easy since the interface is dull and devoid of frames, graphics, or links to other sites of interest. Thus, the only criticism of the site is to provide more links associated with the topic rather than solely developing content-specific material for the physician.

 

Rating: « « « out of five.

 

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Documents of interest

 

Guidelines Help Capitated Physicians Get out From Between a Rock and a Hard Place by Charles M. Jacobs, Thompson Publishing Group, 1998.

The article highlights the pressure facing physicians in the managed care setting and how physicians can plan to prepare themselves to survive and succeed within the new environment. Specifically, the capitated payment methodology and how it affects the delivery of healthcare to the individual. Since capitation has created an agency relationship for the physician to both the insurance company and the patient, the article outlines current use of clinical decision-support criteria that physicians are using to help get them out of their respective financial miseries. The audience of the document appears to be strictly for the individual practicing physician but does offer a modest glimpse at the new environment in which the physician must operate under capitation.

 

Is Paying Physicians By Capitation Wrong? by Timothy Kelley, Editor, Stezzi Communications, 1996.

The focus of this article is on the political and social implications affecting the general patient population's interaction with a physician under the capitated payment methodology. The article discusses the dual agency relationship of the physician between the insurance company and patient. It is argued that this dual agency is illegal since physicians may act on the basis of their personal financial rewards rather than the welfare of the individual patient. To combat the problem, the Oregon Initiative was designed to forbid such a practice. The article is even-handed in its analysis as it states that some honest HMOs may be penalized under such an arrangement. The discussion is intended for the general populace although it focuses primarily on the Oregon political scene. In the final analysis, the page provides a well-rounded political and social background by which to analyze the capitated payment mechanism.

 

Winning the Game of Capitation Contracting by Rick Krohn, Director, Medical Alliances, Inc., October 25, 1997.

The web document discusses various techniques that a physician can employ to succeed in the capitated payment environment. Such topics as preparing for the capitated environment, examining all costs involved in providing care, and contracting with the insurance company are included. It provides a good discussion on the techniques for physicians to consider before and during their capitated careers with managed care organizations. The article is a positive source of information about capitation since it provides the physician with the appropriate knowledge to succeed at the negotiating process with the managed care entities. Although the page is intended for the individual practicing physician, it gives even the lay reader some insight into the considerations necessary for the physician operating within the managed care environment.

 

How Capitation Turned Red Ink to Black At Harris Methodist Health Systems by Neil A. Godbey, Stezzi Communication, August 1997.

When Harris Health System began posting losses, it became apparent that a new compensation system, with incentives to providers to control costs, was in order. Risk sharing was the answer. This particular article gives the reader a balanced perspective to the topic of capitated arrangements. It provides a positive perspective regarding the impact of capitated payments. They enable lower premiums, more lives covered, and an increase in the distribution of risk. The author of the article is executive vice president for the Dallas/East Texas regions of the Health System and has obviously written this paper for executives, business owners, conservatives, and non-physician groups. Although the article provides a balanced perspective with respect to this web document, the document itself is not very even-handed in its analysis and fails to discuss the pitfalls of the capitated arrangement.

 

Managed-care concerns afflict some physicians by Sandy Padilla and Michael Salzman, 1997.

This article provides an introductory explanation of the capitated environment. It explains some of the undercurrent problems that plague the physician and problems that arise for the individual patient that is attempting to seek care. However, the breadth of the document is limited and it does not provide a factual foundation by which to analyze the current environment. Instead, it is meant for the casual reader and not the educated health worker. In the final analysis, I can say that this document is a good start for an individual just learning about the managed care environment in general.
Note: The information below may contain additional relevant materials and documents. Some of the information may be duplicative. The evaluations depend on the both the student doing the review and the information contained at the time of the review. Sites are subject to change!

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