Evaluating health care programs by combining cost with quality of life measures: a case study comparing capitation and fee for service.
OBJECTIVE
To demonstrate cost-effectiveness analysis (CEA) for evaluating different reimbursement models.


METHODS
The CEA used an observational study comparing fee for service (FFS) versus capitation for Medicaid cases with severe mental illness (n=522). Under capitation, services were provided either directly (direct capitation [DC]) by not-for-profit community mental health centers (CMHC), or in a joint venture between CMHCs and a for-profit managed behavioral health organization (MBHO).


METHODS
A nonparametric matching method (genetic matching) was used to identify those cases that minimized baseline differences across the groups. Quality-adjusted life years (QALYs) were reported for each group. Incremental QALYs were valued at different thresholds for a QALY gained, and combined with cost estimates to plot cost-effectiveness acceptability curves.


RESULTS
QALYs were similar across reimbursement models. Compared with FFS, the MBHO model had incremental costs of -$1,991 and the probability that this model was cost-effective exceeded 0.90. The DC model had incremental costs of $4,694; the probability that this model was cost-effective compared with FFS was <0.10.


CONCLUSIONS
A capitation model with a for-profit element was more cost-effective for Medicaid patients with severe mental illness than not-for-profit capitation or FFS models.
Grieve
Richard
R
Department of Public Health and Policy, London School of Hygiene and Tropical Medicine, Keppel St., London WC1E7HT, UK. Richard.Grieve@lshtm.ac.ok
Sekhon
Jasjeet S
JS
Hu
Teh-Wei
TW
Bloom
Joan R
JR
D000328:Adult; D000368:Aged; D002204:Capitation Fee; D003156:Community Mental Health Services / Q000191:economics*; D018588:Fee-for-Service Plans / Q000191:economics*; D005260:Female; D017048:Health Care Costs; D006297:Health Services Accessibility / Q000191:economics; D006302:Health Services Research; D006801:Humans; D007358:Insurance, Psychiatric / Q000191:economics*; D016018:Least-Squares Analysis; D016015:Logistic Models; D008297:Male; D008329:Managed Care Programs / Q000191:economics*; D008484:Medicaid / Q000191:economics; D001523:Mental Disorders / Q000191:economics / Q000628:therapy; D017146:Models, Organizational; D019057:Quality-Adjusted Life Years; D014481:United States