Managed Care & Persons with Disabilities & Chronic Illnesses
Developing Appropriate Capitation Rates
Presenter: Richard Kronick, Ph.D., Professor, Department of Family and Preventive Medicine, University of California at San Diego,
and Co-lnvestigator, Medicaid Working Group, Boston, MA.
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Dr. Kronick began this session by discussing ways in which moving from unadjusted capitation rates to a health-based
payment system (his preferred term, rather than "risk-adjusted capitation payments") could promote positive results, such as:
- Plan innovation.
- Consumer choice.
- Plans being willing to advertise, rather than hide, their success in caring for high-cost
- conditions.
A health-based
payment system can also help to avoid negative behavior by plans, such as risk avoidance.
Dr. Kronick discussed criteria for assessing alternative
health-based payment systems, including:
- Ease of implementation.
- Resistance to gaming.
- Incentives for efficiency.
- Accuracy of payments.
- Clinical coherence.
He then assessed different risk adjustment methods or factors against these criteria, including:
- Demographic variables.
- Health status measures.
- Prior expenditure levels
- Diagnoses.
Dr. Kronick concluded by describing several diagnostic classification
systems, including the Disability Payment System (DPS) that he was involved in developing, and discussing the current
status of the use of health-based payment systems across the States.
References
Kronick R, Dreyfus T, Lee L, Zhou Z. Diagnostic Risk Adjustment for Medicaid:
The Disability Payment System. Health Care Financing Review 17(3): 7-33.
Kronick R, Dreyfus T. The Challenge of Risk Adjustment for People with Disabilities: Health-Based
Payment for Medicaid Programs. A Guide for State Medicaid Programs, Providers and Consumers. (October 1997):i-v.
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