I re-read with interest your philosophy on “micro-capitation”, and am pleased that there are-foreword thinking folks like you, out there.

Currently, we are crafting a paper on capitation economics for a journal and wondered if you have fleshed out your ideas a bit more? We would be delighted to reference you, and your new term, if you might more pragmatically assist us to understand concept with samples, illustrations, use, potential use, etc.

The bit/byte concept is intriguing, but there are all sorts of stochastic gaps left in your theory, which I can not find on the net; not withstanding the financial.

For example; liability, pricing, continuity of care, leadership, etc.

Most importantly, your small unit condition package concept sounds like a FSS idea, but with more drill-down.

Or, could it just be a “sub-capitation” system, as described in the scenario, below.

Sub-capitated Contract:

The often-contentious dilemma of “carve-outs” from capitated managed care contracts is abating in some parts of the country, just as it is accelerating in others.

Under this scenario, medical services or products such as surgery, trauma, physical therapy, immunizations, certain tests, wound care, or prosthetic devices may be excluded from a managed care contract in favor of another, often “sub-capitated”, provider.

However, if your medical organization is contemplating a sub-capitated contract, consider the following scenarios.

For example, an orthopedic group notes that hand surgery is listed in a new capitation contract that it is considering.

The group is not comfortable with such surgery and they ask that these services be excluded. Since the contract provider will not exclude the surgery, the orthopedist group either has to accept it and perform unfamiliar surgery, or reject it.

SCOTT: Is your idea here a third option in this case? If so, please explain in detail. If not, please explain how it is new?

Thus, the following are conditions considered important for carved or sub-capitated risk contracts:

• equivalent risk for the provider and sub-capitated specialist;
• fixed expenses for the sub-capitated specialist;
• predictable and low cost of care, per specialty episode;
• high episodes of specialty care (not unusual or unpredictable events);
• definable and understood responsibilities of the specialist;
• profit and cost savings potential for both the referring and specialty provider; and
• existence of re-insurance, etc.

IOW: What I am trying to determine here – is if your micro-capitation concept is a real emerging philosophy, or merely the disorganized rantings of another frustrated doc?

For the life of me, I still can’t understand exactly what you are trying to say. Sorry.

Maybe it is me, after all.
My Bad!

Please advise if you wish to promote and expand your theory in a more credible print or e-venue; after more thought.

Fraternally,
Dave Marcinko
Atlanta, GA USA
MarcinkoAdvisors@msn.com
http://www.HealthcareFinancials.wordpress.com
http://www.HealthcareFinancials.com

For some physician’s, the future might include “full risk” medical care contacts. This is because of market pressure and the expansion of partial risk PPO contracts

In the full risk payment system, the participant agrees to provide “all” of the care for a given patient population or contract.

In other words, the MD would have to include services such as diabetic management, trauma, radiology, emergency care, pediatric immunizations, geriatrics, home IV antibiotics, DME and all specialty care in the consideration of this “full risk” contract. Of course, increased benefits accompany the increased risk.

The risks: all medical and surgical care necessary for the contracted population.

Since there is the potential for more reward but with much more risks, we believe the physician must carefully consider these contract types and maintain the following relative contingencies:

* Stop-loss re-insurance
* 15-50 mile coverage radius
* Sub-capitated specialists with discounts
* 25-100 providers in the network
* 100-250,000 patient population or more (more patients mean less risk)
* Sub-capitated hospitals, surgical centers, pharmacy and DME vendors with discounts
Encompass a small (<20-25%) portion of the practice.

Certainty, this system does not bode well for the solo practitioner, or even for small medical group practices.

Best.
Dave

Dr. David E. Marcinko; MBA, CMP
Health Economist and CEO – iMBA, Inc.
Atlanta GA, U.S.A.

http://www.HealthcareFinancials.com
http://www.HealthcareFinancials.wordpress.com
http://www.HealthDictionarySeries.com
http://www.MedicalBusinessAdvisors.com
http://www.CertifiedMedicalPlanner.com

From a healthcare economics P.O.V on medical office capitation reimbursement, you also need to know two additional important financial accounting components:

1. Office fixed overhead costs, and;
2. Office variable costs, per patient, since you “live or die” by them.

Of course, with more global capitation for drugs, referrals, OP, ER, OR, hospital, ancillaries, etc., it becomes even more difficult to assess.

This is where medical-activity-based-cost accounting is needed.

And, why insurance companies want to shift the economic “risk” to someone else.
Beware!

Fraternally,
Dave
Dr. David E. Marcinko; MBA, CMP
Atlanta, Georgia USA

http://www.MedicalBusinessAdvisors.com
http://www.HealthcareFinancials.com
http://www.HealthDictionarySeries.com
http://www.CertifiedMedicalPlanner.com
http://www.HealthcareFinancials.wordpress.com

http://healthcarefinancials.wordpress.com/2008/01/23/capitation-redeux-part-two/

Best.
Ann Miller; RN
http://www.HealthcareFinancials.wordpress.com