Pharmacists' views of an experience in capitation reimbursement under the Iowa Medicaid drug program

The Iowa Medicaid Drug Program recently performed a 2-year experiment in capitation reimbursement of pharmacies in two counties. The aim was to reduce costs and improve the quality of services by creating new economic incentives for pharmacists to expand their role in drug use control. This study is part of an evaluation of this experiment. It summarizes the responses to personal interviews held with the owners or managers of the 11 participating pharmacies and with four employee pharmacists. Almost all pharmacists considered capitation a big improvement over the traditional fee-for-service system of Medicaid payment. The benefit most commonly cites was the advance payment system that some respondents said reduced paperwork and improved their cash flow. Value was also seen in requiring Medicaid patients to designate and obtain services from a single pharmacy, but the pharmacists complained about lack of accurate lists of eligible patients and described wide variations in enforcement of the lock-in. Diversity also appeared in their discussion of problems encountered in making product substitutions. Deficiencies in comprehension and motivation were found to be especially prevalent among the salaried employees.