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Physicians #2

Physicians #2. Capitation, Risk, Incentives. Plan for Today. Checkpoint #3 - Revisions due March 30 One or both parts (graded separately) Planning for guest speaker (March 30) Capitation Debate Is capitation good or bad?. Lee Jackson. HPA alumnus from Cleveland, Ohio

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Physicians #2

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  1. Physicians #2 Capitation, Risk, Incentives

  2. Plan for Today • Checkpoint #3 - Revisions due March 30 • One or both parts (graded separately) • Planning for guest speaker (March 30) • Capitation • Debate • Is capitation good or bad?

  3. Lee Jackson • HPA alumnus from Cleveland, Ohio • Works for Medical Mutual of Ohio • Started two weeks before the Columbia/HCA merger fell through • Responsible for developing networks and “growing the business” in region west of Cleveland • E-mail 2 questions that you’d like to ask him (by class on Tuesday)

  4. Distinguishing features of MCO • Limited network • Model types based on relationship with docs • Staff • Group • Network • Individual Practice Association (IPA) • Direct contracting • Capitation

  5. Capitation • Fixed payment to provider for each patient • Adjusted for gender and age • More than ?? percent of primary care physicians receive capitation • About 45 percent of specialists receive capitation

  6. Why capitation? • Advantages for physician • Advantages for plan

  7. Calculating Capitation Payments (2.152 visits * $42.77) / 12 = $7.67 PMPM Cost-sharing PMPM: $1.70 Capitation payment: $7.67 - $1.70 = $5.97 PMPM

  8. Risk: Passing The Hot Potato

  9. Patient Transfers Financial Uncertainty (Risk) to Plan Patient ?? visits @ $43 per visit Premium = $5.97 (plus load) Health Plan ?? visits @ $43 per visit Risk

  10. Plan Transfers Financial Uncertainty (Risk) to PCP Health Plan ?? visits @ $43 per visit Primary Care Physician ?? visits @ $43 per visit Capitation = $5.97 Risk

  11. Risk Pools • PCP has to share excess costs for specialty referrals and hospital care, too • Usually financed by withholding part(5%-20%) of capitation • Plan reconciles with PCP at end of year

  12. Capitation with 10% withholding (2.152 visits * $42.77) / 12 = $7.67 PMPM Cost-sharing PMPM: $1.70 Withhold: 10% of $7.67 = $.77 PMPM Capitation payment: $7.67 - $1.70 - $.77 = $5.20

  13. Risk pools Specialty and Referral $35.65 PMPM Hospital $26.28 PMPM Other $36.88 PMPM Primary Care Withhold: $.77 PMPM Primary Care $5.20 PMPM Total $104.79 PMPM

  14. End-of-Year Reconciliation Specialty and Referral $35.65 PMPM Hospital $26.28 PMPM Other $36.88 PMPM $36.00 actual $25.00 actual $37.00 actual Primary Care $5.20 PMPM Total $104.79 PMPM Primary Care Withhold: $.77 PMPM

  15. Should physicians be at risk for utilization targets?? • Opening statement (2 minutes) • Two questions from opponents • Closing statement (1 minute)

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