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*Last Updated in 2003*
The American Geriatrics Society (AGS) believes that capitation can be an efficient approach for Medicare to finance high-quality, cost-effective geriatrics. The AGS recognizes that the Medicare Plus Choice program offers capitated funding for several heterogeneous managed care organization (MCO) types. Regardless of organizational type, however, the AGS urges policymakers, administrators, health care professionals, and consumers to understand what core elements of care are required to meet the unique needs of older adults. The purpose of this Position Statement is to provide these groups with guidance for developing capitated health care delivery systems that can meet these needs.
In order to realize the potential flexibility and creativity inherent in capitated financing, MCOs should be based on the following principles:
- MCOs should develop special processes for providing high-quality health care to enrollees who need complex health services, including:
- Screening the enrolled population to identify individuals with special needs. Plans should use valid and reliable instruments to screen their enrollees regularly. They should assess the clinical needs of high-risk enrollees for both functional status and quality of life.
Rationale: About 10-15% of beneficiaries, most of whom have several chronic conditions, account for 70-80% of Medicare's annual payments for health care. Early identification of those who are at highest risk for requiring expensive care - and assessing their clinical needs - would facilitate coordination of care and timely preventive interventions designed to improve the clinical and financial outcomes of care.
References:
Boult C, Pualwan TF, Fox PD et al. Identification and assessment of high-risk seniors. Am J Managed Care 1998;4:1137-1146.
- Coordinating the actions of all providers across the continuum of enrolled beneficiaries' care.
Rationale: Coordination improves the quality and the outcomes of health care, including safety, cost and satisfaction with care. The coordination of care can be made more efficient and effective by utilizing integrated medical records as well as improved communication tools.
References:
Kane RL. Managed care as a vehicle for delivering more effective chronic care for older persons. J Am Geriatr Soc. 1998 Aug; 46(8):1034-9.
Eng, C, Pedulla, J, Eleazer, P, McCann, P, Fox, N. Program of all-inclusive care for the elderly (PACE): an innovative model of integrated geriatric care and financing. J Am Geriatr Soc 1997; 45: 223-232.
- Offering effective health promotion, disease prevention, and self-management programs.
Rationale: Such programs can prevent or delay the progression of disease, resulting in better patient outcomes and lower costs of health care. In addition programs that provide education of patients and their caregivers with regard to their conditions and self-management initiatives empower them to be proactive and choose wise alternatives.
References:
Nichol KL, Margolis KL, Wuorenma J, Von Sternberg T. The efficacy and cost effectiveness of vaccination against influenza among elderly persons living in the community. N Engl J Med 1994 Sep 22;331(12):778-84.
Lorig KR, Ritter P, Stewart AL, Sobel DS, Brown BW Jr, Bandura A, Gonzalez VM, Laurent DD, Holman HR. Chronic disease self-management program: 2-year health status and health care utilization outcomes. Med Care 2001 Nov;39(11):1217-23.
Mittelman MS, Ferris SH, Shulman E, Steinberg G, Levin B. A family intervention to delay nursing home placement of patients with Alzheimer disease. A randomized controlled trial. JAMA 1996 Dec 4;276(21):1725-31.
- Making available the services of health care professionals from several disciplines, including physicians, nurses, social workers, pharmacists, and rehabilitation therapists. These professionals should function as interdisciplinary teams in managing not only the medical conditions but also social factors that affect high-risk beneficiaries' well-being.
Rationale: The interdisciplinary team approach allows for comprehensive, coordinated assessment and management of beneficiaries' medical, psychological, social and functional needs - and those of their unpaid caregivers.
References:
Rich, MW, Beckham, V, Wittenberg, C, et al. A multidisciplinary intervention to prevent the readmission of elderly patients with congestive heart failure. N Engl J Med 1995; 333:1190-1195.
Reuben DB, Frank JC, Hirsch SH, McGuigan KA, Maly RC. A randomized clinical trial of outpatient comprehensive geriatric assessment coupled with an intervention to increase adherence to recommendations. J Am Geriatr Soc 1999 Mar;47(3):269-76
Boult C, Boult L, Morishita L, Dowd B, Kane RL, Urdangarin C. Randomized trial of outpatient geriatric evaluation and management. J Am Geriatr Soc 2001;49(4):351-359.
Cohen HJ, Feussner JR, Weinberger M et al. A controlled trial of inpatient and outpatient geriatric evaluation and management. N Engl J Med 2002 Mar 21;346(12):905-12.
- Making geriatric expertise available for designing and administering geriatric programs and for consultation with primary care physicians, case managers, and other providers.
Rationale:
MCOs would be well served by using a geriatrician in a medical director role to help guide the development and management of programs necessary for success in caring for seniors. Geriatricians have the background necessary in efficiently and effectively managing patients in teams, as well as managing the care of complex patients with multiple problems across the continuum of care.
References:
AGS Health Care Systems Committee. American Geriatrics Society. Role of the geriatrician in managed care. J Am Geriatr Soc 1999 May;47(5):611-2.
Von Sternberg T. The role of the geriatrician in managed care: opportunities and responsibilities. J Am Geriatr Soc 1999 May;47(5):605-10.
The quality of the health care provided to beneficiaries by MCOs should be measured consistently and reported regularly to the plans' executives and providers, to CMS, and to the public. New instruments designed to measure the quality of outpatient care and coordination of care must be developed and tested for reliability and validity.
Rationale: Credible, understandable information about the quality of health care is essential to organizations' processes for improving quality and to consumers' efforts to make informed choices from among the available health plans and providers.
References:
Wicks, E.K., Meyer, J.A., Making Report Cards Work, Health Affairs 1999 18(2): 152- 156.
Capitation rates in all regions of the country should be sufficient for providing high-quality healthcare for all Medicare beneficiaries, regardless of the intensity of their clinical needs. Specifically, the Centers for Medicare and Medicaid Services (CMS) should provide capitation that reflects the probable cost of caring for each enrolled beneficiary. This should be accomplished by risk-adjusting capitation payments according to individual beneficiaries' diagnosis, functional status, and utilization.
Rationale: Capitation payments that acknowledge that beneficiaries with chronic conditions require more health care than those who are healthy would encourage MCOs to enroll beneficiaries who have chronic conditions and to provide them with special services designed to address their needs for complex care. In contrast, inadequate risk-adjustment of capitation payments is a disincentive for plans to enroll frail or medically complex beneficiaries or to offer special services that might encourage such beneficiaries to enroll.
References:
Temkin-Greener, G, Meiners, MR, Gruenberg, L. PACE and the Medicare+Choice risk-adjusted payment model. Inquiry 2001 Spring; 38(1):60-72.
Fisher, ES, Wennberg, DE, Stukel, TA, Gotleb, DJ, Pinder, EL. The implications of regional variations in medicare spending. part 2: health outcomes and satisfaction with care. Annals of Internal Medicine 2003; 138(4):288-299.
Pacala JT, Boult C, Urdangarin C et al. Using self-reported data to predict expenditures
for the health care of older people. J Am Geriatr Soc 2003 (in press).
American Geriatrics Society and approved by the AGS Board of Directors in November 1995. Reviewed and Revised by Managed Care Task Force, May 1997. Revised by the AGS Health Care Systems Committee, with special thanks to Drs. Eric Coleman, Carmel Dyer, Alan Lazaroff, Steven Phillips, and Richard Stefanacci and approved in May 2003 by the AGS Board of Directors Representative to the Health Care Systems Committee. AGS, The Empire State Building, 350 Fifth Avenue, Suite 801 New York, NY 10118.
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