Trends in provider capitation,1996–2000

Abstract

We examine the extent to which the health care services delivered by physicians and hospitals in public and private health plans are capitated, and how this changed from 1996 to 2000. The data are from the 1996 to 2000 years of the nationally representative Medical Expenditure Panel Survey (MEPS). Information on whether health care use was covered by capitated arrangements was obtained from billing offices of physicians and hospitals. We compare changes in the percentage of office-based physician visits, hospital outpatient department(OPD) visits, hospital emergency department (ED) visits, and hospital inpatient stays that are covered by capitation arrangements. We also compare differences by health insurance coverage and socio-demographic characteristics. We use standard two-tail tests of significance, accounting for the complex survey design of the MEPS. We find that only 15 percent of visits to office-based physicians were capitated in 1996, declining to 13 percent in 2000. Even among HMO enrollees, visits covered by a provider capitation arrangement represented a minority of all office visits, declining to 25 percent for Private HMO enrollees and 15 percent for Medicaid HMO enrollees in 2000. Even smaller proportions of hospital services were capitated. Conclusions: Capitation remains relatively rare even among public and private HMO enrollees.