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Controlling supply expenses through capitated supply contracting.

J C Kowalski1

  • 1Kowalski-Dickow Associates, Inc., Mequon, WI, USA.

Healthcare Financial Management : Journal of the Healthcare Financial Management Association
|June 6, 1997
PubMed
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Capitated supply contracting helps providers manage financial challenges in managed care by sharing risks and rewards with suppliers. Success requires tracking expenses and fostering cooperative supplier relationships.

Area of Science:

  • Healthcare Management
  • Supply Chain Optimization
  • Financial Risk Management

Background:

  • Healthcare providers face financial pressures within managed care environments.
  • Controlling supply expenses is a key strategy for financial stability.

Purpose of the Study:

  • To explore the implementation and success factors of capitated supply contracting.
  • To analyze risk/reward sharing models in healthcare procurement.

Main Methods:

  • Analysis of capitated supply contracting models.
  • Identification of essential data tracking for expense drivers.
  • Examination of necessary provider-supplier relationship dynamics.

Main Results:

  • Capitated contracts involve fixed prospective pricing with shared losses or savings.

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  • Successful arrangements necessitate detailed tracking of supply expense drivers.
  • Cooperative provider-supplier relationships are crucial for effective contracting.

    • Conclusions:

    • Capitated supply contracting offers a mechanism for providers to manage supply expenses.
    • Effective implementation relies on robust data systems and strong supplier partnerships.
    • This model aligns provider and supplier incentives for cost containment.