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Inferring capitation rates from aggregate health plans’ costs

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  • Amir Shmueli

Abstract

Setting risk‐adjusted capitation rates in health systems with centralized financing and decentralized delivery is one of the most intriguing policy issues. The common practice to set capitation group rates is based on individual data collected from either population surveys or medical records, using a single—and in most cases arbitrary—set of relative unit costs of services. This paper presents a method for estimating group‐specific mean costs and capitation rates using a panel of aggregate cost data of the competing health plans and the composition of their populations. This method is used to estimate mean costs and capitation rates for the Israeli health care system. The limited data available severely constrains the range of estimable models, however, the results evoke some questions with regards to reimbursement and rates presently used, as well as to the methodology used to estimate them. Copyright © 1999 John Wiley & Sons, Ltd.

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  • Amir Shmueli, 1999. "Inferring capitation rates from aggregate health plans’ costs," Health Economics, John Wiley & Sons, Ltd., vol. 8(6), pages 547-552, September.
    • Handle: RePEc:wly:hlthec:v:8:y:1999:i:6:p:547-552
    DOI: 10.1002/(SICI)1099-1050(199909)8:6<547::AID-HEC463>3.0.CO;2-U
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    1. Erik Schokkaert & Geert Dhaene & Carine Van De Voorde, 1998. "Risk adjustment and the trade‐off between efficiency and risk selection: an application of the theory of fair compensation," Health Economics, John Wiley & Sons, Ltd., vol. 7(5), pages 465-480, August.
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    1. Oliveira, Monica Duarte & Bevan, Gwyn, 2003. "Measuring geographic inequities in the Portuguese health care system: an estimation of hospital care needs," Health Policy, Elsevier, vol. 66(3), pages 277-293, December.

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