Health care utilization by old-old long-term care facility residents: how do Medicare fee-for-service and capitation rates compare?
OBJECTIVE
To describe the healthcare utilization of a long-term care population receiving primary and specialty care in a closed system and to compare Medicare fee-for-service (FFS) reimbursement with the amount that would have been paid under capitation for these services.


METHODS
A life care community in California composed of two facilities, both having residential care and nursing facility (NF) beds.


METHODS
Residents (n = 700) living in the community between September 1995 and February 1996.


METHODS
Data on Medicare Part A and Part B reimbursements were gathered from billing records for hospitalizations, based on diagnostic related group payments, primary and specialty care visits, various procedures, diagnostic tests, and therapeutic services. These data were compared with what the facility, in collaboration with the providers and an affiliated hospital, would have received under Medicare capitated rates at that time.


RESULTS
Annually, residents averaged 16.3 primary care visits, 7.7 specialist visits, and 3453 hospital days per thousand. Nursing facility residents received significantly more primary care than did those in residential care. Total Medicare Part A and B payments per resident per month averaged $558. The monthly capitation rate in effect at the time for this population was substantially higher at $1085, generating an annual "risk pool" of $9.1 million. Care provided in the two facilities varied greatly. Hospitalization rates, clinic-based primary care and specialist visits, and therapy sessions were greater in facility one. Overall expenditures were lower for residents at facility two, where the majority of care was provided by trained geriatricians in collaboration with physician extenders and without sophisticated clinical pathways and utilization controls.


CONCLUSIONS
Our data support other studies that suggest that teams of geriatricians and physician extenders can reduce hospitalization rates and overall expenditures. Capitated rates for the frail, geriatric population warrant careful study. These rates must balance fiscal responsibility with the need for adequate, risk-adjusted payments that create incentives for providers to produce high quality as well as cost-effective care.
Phillips
V L
VL
Department of Health Policy and Management, Rollins School of Public Health of Emory University, Atlanta, Georgia 30322, USA.
Paul
W
W
Becker
E R
ER
Osterweil
D
D
Ouslander
J G
JG
D000368:Aged; D000369:Aged, 80 and over; D002204:Capitation Fee / Q000706:statistics & numerical data*; D004470:Economics, Medical; D018588:Fee-for-Service Plans / Q000191:economics* / Q000706:statistics & numerical data*; D005102:Health Expenditures / Q000706:statistics & numerical data; D006302:Health Services Research; D006707:Homes for the Aged; D006760:Hospitalization / Q000191:economics*; D006801:Humans; D015141:Los Angeles; D016344:Medicare Part A / Q000191:economics* / Q000706:statistics & numerical data*; D016345:Medicare Part B / Q000191:economics* / Q000706:statistics & numerical data*; D009735:Nursing Homes; D011320:Primary Health Care / Q000191:economics* / Q000706:statistics & numerical data*; D020414:Risk Sharing, Financial; D013038:Specialization; D014481:United States