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Identifying costs for capitation in psychiatric case management

J J Baker1, P Chiverton, V Hines

  • 1Case Western Reserve School of Nursing, USA.

Journal of Health Care Finance
|March 21, 1998
PubMed
Summary

This study demonstrates how a hospital calculated capitation costs for psychiatric case management using activity-based costing. Data was collected over 18 months for nurses and patients in a pilot project.

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Area of Science:

  • Healthcare Management
  • Health Economics
  • Psychiatric Nursing

Background:

  • Capitation models require accurate cost identification for financial sustainability.
  • Psychiatric case management involves complex patient needs and resource utilization.
  • Previous cost identification methods may not fully capture the nuances of specialized care.

Purpose of the Study:

  • To illustrate a practical approach for determining capitation costs in psychiatric case management.
  • To present findings from an 18-month pilot project on postacute psychiatric care.
  • To apply activity-based costing for granular cost analysis.

Main Methods:

  • Implemented an 18-month postacute case management pilot project.
  • Collected data on a nurse-specific and patient-specific basis.

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  • Utilized activity-based costing (ABC) methodology for cost identification.

    • Main Results:

    • Detailed cost data was successfully gathered for psychiatric case management.
    • Activity-based costing provided a clear breakdown of expenses.
    • The pilot project yielded insights into cost drivers for capitation.

    Conclusions:

    • Activity-based costing is a viable method for identifying psychiatric case management costs.
    • Accurate cost data is crucial for effective capitation-based financial planning.
    • This approach can inform resource allocation and improve financial performance.