Risk adjustment of capitation payments to behavioral health care carve-outs: How well do existing methodologies account for psychiatric disability?

Susan Ettner (), Richard Frank, Tami Mark and Mark Smith

Health Care Management Science, 2000, vol. 3, issue 2, 159-169

Abstract: This study used 1994–1995 administrative data from a large public employer to examine the viability of commercial risk adjustment systems for setting capitation payments to competing behavioral health care “carve-outs”. The ability of Hierarchical Condition Categories and Adjusted Diagnostic Groups to predict psychiatric expenditures was improved by controlling separately for psychiatric disability. However, even the best models underpredicted expenditures of patients with psychiatric disability by 15%. Relative to full capitation, “mixed” payment systems and soft capitation reduce the ability of carve-outs to earn disproportionate profits by enrolling healthy patients and avoiding sick ones, yet also diminish incentives for cost containment. Copyright Kluwer Academic Publishers 2000

Date: 2000
References: Add references at CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
http://hdl.handle.net/10.1023/A:1019033105715 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:kap:hcarem:v:3:y:2000:i:2:p:159-169

Ordering information: This journal article can be ordered from
http://www.springer.com/journal/10729

DOI: 10.1023/A:1019033105715

Access Statistics for this article

Health Care Management Science is currently edited by Yasar Ozcan

More articles in Health Care Management Science from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().