CAPITATION FOR CARDIOLOGISTS - ACCEPTING RISK FOR CORONARY-ARTERY DISEASE UNDER MANAGED CARE

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.