Capitation rates increase

January 1, 2001

Pharmaceutical Representative

Healthcare provider organizations that hung tight during the dark days of risk contracting are beginning to see a payoff for their persistence, according to a new report.

Healthcare provider organizations that hung tight during the dark days of risk contracting are beginning to see a payoff for their persistence, according to a new report. Respondents to the 2000 Capitation Survey report significantly higher per-member, per-month rates in nearly all categories and specialties.

The survey's findings reflect two concurrent phenomena in the risk-contracting market, according to David Schwartz, publisher of the 2000 Capitation Survey.

"First, rates are simply up," said Schwartz. "Physicians and other providers are finally seeing recent premium increases passed along in their contracts. And second, as poorly performing groups have dropped out of the market, better performers with higher rates are pushing the overall average up." Overall, nearly 70% of respondents report that their rates have increased this year. Rate increases in many specialties featured in the survey are well into the double digits.

Capitation's demise?

The survey also suggests that the widely reported exodus from capitation has been significantly overblown. In fact, 78% of respondents report that they are either seeking more capitation or maintaining their current level of risk agreements.

"Clearly, the oft-reported 'demise' of capitation has been based primarily on high-profile anecdotes, not data," said Schwartz. "Risk contracting is as much a part of most providers' lives as it ever was, and capitation appears to be poised for at least moderate growth in the coming two to three years. In fact, if employers continue to see the kind of premium increases they've seen this year, capitation may make a very big comeback as cost control becomes top priority again." PR

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