Rl. Mcnamara et al., CAPITATION FOR CARDIOLOGISTS - ACCEPTING RISK FOR CORONARY-ARTERY DISEASE UNDER MANAGED CARE, The American journal of cardiology, 82(10), 1998, pp. 1178-1182
Patients with chronic disease may be excluded from capitated managed c
are plans due to higher than average expected costs, In an attempt to
remedy this inequity, one type of risk adjustment technique proposes t
o set separate capitation rates for certain chronic illnesses, includi
ng coronary artery disease (CAD), Cardiologists, who increasingly are
requested to accept capitation, will benefit from understanding the im
pact of using clinical factors as opposed to using demographic factors
to set capitation rates. Using a 5% national random sample of the 199
2 Medicare population, we determined mean annual expenditures and vari
ation in expenditures of individuals with CAD, We compared the use of
2 demographic factors currently used for capitation rate adjustment (a
ge and gender) with 2 factors not currently used-3-digit international
Classification of Disease (ICD-9) code (a measure for severity) and C
harlson index (a measure for comorbidity), Mean annual expenditures fo
r individuals with CAD were more than double mean annual expenditures
for the general Medicare population ($6,944 vs $3,247). Among individu
als with CAD, mean expenditures of subgroups defined by both age and g
ender ranged from $6,205 to $7,724. in comparison, stratifying by meas
ures of severity and comorbidity identified subgroups with lower and h
igher mean expenditures, producing a range of $1,702 to $19,959. Subst
antial variation of expenditures For individuals within subgroups defi
ned by severity and comorbidity remained, with few patients having sub
stantially higher expenditures than the rest. When capitation rates ar
e set with the use of demographic factors alone, patients may be subje
cted to risk selection and physicians to financial loss. Using clinica
l measures may decrease the incentive for patient risk selection, but
substantial financial risk to physicians would remain, because of a re
latively few patients with high expenditures (or costs). (C) 1998 by E
xcerpta Medica, Inc.