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Value-based formulas for purchasing. PEHP's designated service provider program: value-based purchasing through

D W Emery1

  • 1Public Employees Health Program of Utah, Salt Lake City, USA.

Managed Care Quarterly
|January 1, 1997
PubMed
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Managed care often uses flawed risk models. This study advocates for multidimensional risk assessment and global fees, enhancing patient choice and provider efficiency in healthcare purchasing.

Area of Science:

  • Health economics
  • Healthcare management
  • Risk assessment

Background:

  • Managed care and capitation are often conflated.
  • Capitation models are frequently based on a flawed, unidimensional view of risk.
  • This approach limits effective healthcare purchasing strategies.

Purpose of the Study:

  • To challenge the unidimensional model of risk in managed care.
  • To propose a multidimensional risk model for healthcare purchasing.
  • To advocate for global fees as an optimal purchasing modality.

Main Methods:

  • Rejection of the unidimensional risk model by PEHP of Utah.
  • Adoption of a multidimensional risk model.
  • Utilizing global fees for episodes of care as the purchasing strategy.

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Main Results:

  • Global fees provide enhanced purchasing clarity.
  • Providers can focus more efficiently on the Marginal Rate of Technical Substitution.
  • The multidimensional model aligns with the complex reality of healthcare risk.

Conclusions:

  • Global fees are a superior purchasing modality compared to traditional capitation.
  • This approach optimizes both patient choice and provider cost-consciousness.
  • Adopting a multidimensional risk framework is crucial for effective managed care.