Reevaluation of capitation contracting in New York and California

We obtained detailed quantitative and interview data from Aetna U.S. Healthcare and six physician organizations to examine changes between 1998 and 2000 in the scope of capitation contracting and delegation of responsibility for claims payment and medical management in New York and California. The physician organizations in New York included Benchmark (Continuum), Montefiore IPA, and Lenox Hill Healthcare Network. In California they included Brown and Toland Medical Group, Monarch Healthcare, and Santa Clara County IPA. In both California, where global and shared risk capitation have been common, and New York, where they have not, we find movement to reduce the scope of prepayment and a rethinking of the delegated contractual relationship by physician organizations and health plans. This represents a departure from the 1990s, when many industry participants and analysts expected capitated and delegated relationships to spread across the nation.