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Medical Care:
doi: 10.1097/MLR.0b013e31825c3e14
Special Editorial

Risk-adjusted Capitation in an Era of Personalized Medicine: A Dangerous Opportunity to Bend the Health Care Cost Curve

Horner, Ronnie D. PhD

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Department of Internal Medicine, University of Cincinnati, Cincinnati, OH

The author declares no conflict of interest.

Reprints: Ronnie D. Horner, PhD, Department of Internal Medicine, Stetson Building-Suite 4200, 260 Stetson Place, Cincinnati, OH 45219. E-mail: ronnie.horner@uc.edu.

In this issue of Medical Care, we have an article of import and timeliness to current conversations on “bending the health care cost curve.”1 The study by Drs Ash and Ellis is also sure to generate controversy, a preview of which the peer-review process has already provided. I am very pleased that Medical Care has chosen not to shy away from the controversy but rather has embraced it thoughtfully by framing the topic with alternative perspectives. These are conveyed in the accompanying commentaries.2–4

Drs Ash and Ellis propose an approach for risk-adjusting capitation payments and performance awards to primary-care providers. As pointed out by the commentators, the proposed approach is a method and not the method for accomplishing the task. The commentators have 2 related issues. First, the approach of Drs Ash and Ellis involves population-based estimates of health care utilization. The concern here is that population-based estimates probably do not accommodate well, if at all, the variation among individuals in their need for health care. The second issue raised by the commentators is that, in the Ash and Ellis approach, the “basket” of health care services is filled with those that “should” be provided as determined from past expenditures, rather than those a particular patient actually needs currently. This concern is about the potential mismatch between the services the particular patient needs and the services upon which the payment formula is based; the level of capitation may not be able to accommodate the set of services provided if they are substantially more costly than those upon which the capitation is based. Embedded in this concern is the issue of who determines what should be provided. These are weighty matters because the impact on individual patients could be profound. Such considerations should not be brushed aside in our rush to bend the health care cost curve.

As Dr Goroll notes in his commentary, the conversation around bending the health care cost curve should not be focused on how we pay for health insurance but on how we pay for health care.2 Why is this so? Because the approach to payment determines what is provided. As the old adage goes, “You get what you pay for.” If a therapy—say a breast cancer therapy—is determined by some health care authority not to be cost-effective on the basis of studies (a population-based finding) and, therefore, recommends against use of that therapy, insurance carriers may deny payment to providers if the therapy is prescribed for a patient. This possibility, in turn, heightens the likelihood that the therapy will not be prescribed unless the individual patient has the wherewithal to pay for it. It matters not a wit whether the patient is responsive to that therapy and not to alternative therapies; there is an enhanced likelihood that she will not receive the therapy (and its therapeutic benefit) unless she can pay for it.

Personalized medicine involves using the individual patient’s personal information, notably genomic and proteomic data, to improve the effectiveness of health care through, among other actions, the selection of therapies with the greatest likelihood of benefit for the patient. Admittedly, the dream of personalized medicine has yet to be fully realized, but it represents the direction of health care for now and into the foreseeable future. Accordingly, we need approaches for paying for health care that are compatible with the goal of personalized medicine, ensuring that patients receive the most appropriate care when they need it.

I have been involved in health care research long enough to know that health care policies deriving from scientific research are far too often victims of a powerful law: the law of unintended consequences. Thus, health scientists have an obligation to think through the full implications of proposed policies, especially the potential unintended consequences. With the article by Drs Ash and Ellis and the set of commentaries, we have some fodder for beginning the conversation about risk adjustment for determining capitation payment and performance awards for primary-care providers.

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REFERENCES

1. Ash AS, Ellis RP. Risk-adjusted payment and performance assessment for primary care. Medical Care. 2012;50:643–653

2. Goroll A. Risk adjustment for primary care: an essential tool for health system reform. Medical Care. 2012;50:637–639

3. Grazier KL. A commentary on risk-adjusted payment and performance assessment for primary care. Medical Care. 2012;50:640–642

4. Stukenborg GJ. Commentary on risk-adjusted payment and performance assessment for primary care. Medical Care. 2012;50:635–636

© 2012 Lippincott Williams & Wilkins, Inc.

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