Capitation and control of risk in managed care

In the environment of capitation for health care, physicians assume risks for the condition of their patients and, in essence, act as a type of insurance company. For example, in patients with diabetes, risks include retinopathy and cataracts, peripheral vascular disease and amputations, cardiovascular disease, hyperlipidemia, hypertension, high-risk pregnancies, and renal failure as well as its long-term consequences. Transplantation and million-dollar births are uncommon but extremely expensive events that may be best managed by a partnering arrangement that distributes the risk (and also shares in the potential profit). Health maintenance organizations manage risks by eliminating high-cost patients, decreasing length of stay, and reducing payments to physicians. In formulation of a proposal to assume care for a specific population, the characteristics of the patients and their history of utilization of health-care services should be well understood. With background information, projection of risks becomes more accurate. For management of a contract under capitation, the ability to track long-term outcomes will help to optimize the health care provided.