Capitated contracting of integrated health provider organizations

This paper examines global capitation of integrated health provider organiz ations that link physicians and hospitals, such as physician-hospital organ izations and management service organisations. These organizations have pro liferated in recent years, but their contracting activity has not been stud ied. We develop a conceptual model to understand the capitated contracting bargaining process. Exploratory multivariate analysis suggests that global capitation of these organisations is more common in markets with high healt h maintenance organization (HMO) market share, greater numbers of HMOs, and fewer physician group practices. Additionally, health provider organizatio ns with more complex case mix, nonprofit status, more affiliated physicians , health system affiliations, and diversity in physician organizational arr angements are more likely to have global capitation. Finally, state regulat ion of provider contracting with self-insured employers appears to have spi llover effects on health plan risk contracting with health providers.