2003 Capitation Survey Shows Big Jumps in PMPM Rates; Experts See Resurgence in Risk Contracting on the Horizon

After several years of double digit premium hikes, health plans are finally beginning to pass some of their revenue gains on to capitated providers in the form of hefty rate increases, the results of National Health Informations just-released 2003 Capitation Survey suggest. At the same time, experts commenting on the survey results predict a renaissance in risk contracting activity as rate hikes combine with new pay for performance" incentives to make capitation once again attractive financially for physicians.

ATLANTA, GA (PRWEB) November 21, 2003 --After several years of double digit premium hikes, health plans are finally beginning to pass some of their revenue gains on to capitated providers in the form of hefty rate increases, the results of National Health Informations just-released 2003 Capitation Survey suggest. At the same time, experts commenting on the survey results predict a renaissance in risk contracting activity as rate hikes combine with new pay for performance" incentives to make capitation once again attractive financially for physicians.

Capitation is on the mend," commented Dirk Thornley, vice president of the Los Angeles-based California Association of Physician Groups, in an article accompanying the survey results.

Every category of survey respondent experienced healthy gains in total capitation revenue, ranging from 4.1% for specialists to more than 20% for responding hospitals. The average number of capitated contracts rose 22% for respondents in multispecialty groups and 36% for specialists.

Most specialties saw significant increases in their commercial and Medicare per member per month rates over the previous year, with particularly large increases -- 30% or more in some cases -- noted for anesthesiology, allergy, durable medical equipment, general surgery, hematology/oncology, and physical medicine/rehab.

Our data indicate the potential for a resurgence in risk contracting," says David Schwartz, president of National Health Information. Once you give providers an adequate rate and the right incentives, capitation makes a lot of sense -- it always has. And in this economy, employers will likely remember that the only period of zero inflation in health costs was during the mid-90s, when capitation and managed care dominated. Capitation will very likely be revisited, though hopefully some of the lessons learned the first time around will be applied more rigorously," Schwartz comments.

The 2003 Capitation Survey features the latest PMPM rate benchmarks available for virtually every specialty, as well as for primary care, hospital services, global coverage, and other categories. The rates in nearly all cases are reported separately for commercial and Medicare populations. Select Medicaid rates are also included.

Each PMPM rate benchmark is reported as a national average culled from 539 respondents to NHIs survey of subscribers. Each specialty or category also includes the high, low, and median reported rate, and three years of data are included to show trends over time. These all-new benchmarks are based on 2003 contracts.

Along with the critical PMPM rates, the survey includes key benchmark data on days per 1,000, admits per 1,000, visits per 1,000, and length of stay, as well as stop loss premiums and attachment points.

Data on capitation contracting trends also are featured, including contracting volume, rate increases, profitability, and key perfomance improvement strategies.

The results -- displayed in 70 tables and charts -- are compiled from surveys sent to readers of Capitation Management Report and Capitation Rates & Data, the two leading industry publications on risk contracting, which are also published by National Health Information.
   
Our survey gives healthcare providers and managed care organizations a unique data set to use for benchmarking and to help in contract negotiations," Schwartz says. These PMPM rates, utilization statistics, and capitation trend data are simply not available anywhere else."

The complete survey is available for $99 plus $5.95 shipping & handling from National Health Information, P.O. Box 15429, Atlanta, GA 30333-0429. Telephone: 1-800-597-6300. Fax: 404-607-0095. Website: www.nhionline.net.
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