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Rate adjusters for Medicare under capitation.

J P Newhouse

    Health Care Financing Review
    |December 11, 1985
    PubMed
    Summary
    This summary is machine-generated.

    Improving the average adjusted per capita cost (AAPCC) is crucial for Medicare capitation. Current AAPCC methods need more sensitive adjusters and methods to reduce geographic variance for equitable risk class distribution.

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    Area of Science:

    • Health Economics
    • Healthcare Policy
    • Medicare

    Background:

    • Capitation models in healthcare are complex.
    • The average adjusted per capita cost (AAPCC) is a key metric for Medicare capitation.
    • Current AAPCC calculations face challenges with risk mix and geographic variation.

    Purpose of the Study:

    • To identify and address critical issues within the current AAPCC estimation process.
    • To propose improvements for more accurate and equitable Medicare capitation.
    • To ensure patient access to care within alternative delivery systems under capitation.

    Main Methods:

    • Analysis of existing AAPCC calculation methodologies.
    • Exploration of statistical techniques like shrinkage estimators.

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  • Evaluation of risk adjustment factors and their impact on cost estimation.

    • Main Results:

    • The AAPCC is sensitive to the risk mix within the fee-for-service system.
    • Significant geographic variations exist in current AAPCC estimates.
    • Existing adjusters do not sufficiently create homogeneous risk classes.

    Conclusions:

    • Enhanced adjusters for AAPCC are necessary for accurate risk assessment.
    • Shrinkage estimators show potential for reducing geographic variance in AAPCC.
    • A combination of capitation and fee-for-service may be preferable until AAPCC improvements are implemented to prevent access issues.