Medicare risk contracts--success or failure?

Area of Science:

• Healthcare Administration
• Health Economics
• Public Policy

Background:

• Recent legislation has increased interest in risk-based contracting within the healthcare sector.
• A 1980 demonstration by the Health Care Financing Administration (HCFA) laid groundwork for current capitation programs.
• Understanding different provider models is crucial for navigating risk contracts.

Purpose of the Study:

• To discuss significant issues for organizations considering Medicare risk-based contracts.
• To provide insights from a medical group practice and a health maintenance organization involved in a demonstration program.
• To highlight the impact of the HCFA demonstration on contemporary capitation models.

Main Methods:

• Analysis of perspectives from administrators at Marshfield Clinic and MedCenters Health Plan.
• Review of experiences from a demonstration program initiated in 1980.
• Discussion of key challenges and considerations for risk contracting.

Main Results:

• Insights from both a medical group practice and a health maintenance organization are presented.
• The study identifies critical factors for successful Medicare risk-based contracting.
• The 1980 HCFA demonstration provided valuable input for current capitation programs.

Conclusions:

• Organizations considering Medicare risk contracts should carefully evaluate significant issues.
• The perspectives of diverse healthcare entities are essential for understanding risk contracting.
• The historical HCFA demonstration offers lessons for current healthcare financing models.