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Giving physicians incentives to contain costs under Medicaid
1Urban Institute, Washington, DC 20037.
Abstract:
In this article, the risk arrangements in Medicaid programs that put physicians at risk are summarized. These programs--partial capitation and health insuring organizations--pay physicians a capitation amount to cover some or all physician services. Physicians also receive part of the savings from reduced hospitalization. Most of these programs have successfully lowered Medicaid costs. They could serve as models for other Medicaid programs, State-level programs to cover people ineligible for Medicaid, and programs abroad, such as in the United Kingdom.
Insights
Physician risk arrangements in Medicaid programs, like partial capitation, successfully reduced healthcare costs by incentivizing savings. These models offer potential for broader application in public and international health programs.
Area of Science:
- Health Economics
- Public Health Policy
- Healthcare Management
Background:
- Medicaid programs increasingly explore innovative payment models.
- Physician financial risk is a key component in managing healthcare expenditures.
Purpose of the Study:
- To summarize risk arrangements in Medicaid programs involving physicians.
- To evaluate the effectiveness of these programs in cost containment.
Main Methods:
- Review of partial capitation and health insuring organization models.
- Analysis of physician payment structures including capitation and shared savings.
Main Results:
- Partial capitation and health insuring organizations have demonstrated success in lowering Medicaid costs.
- Physician participation in risk-sharing arrangements can lead to reduced hospitalization rates.
Conclusions:
- Medicaid risk arrangements for physicians are effective cost-saving strategies.
- These programs can serve as adaptable models for various healthcare systems globally.