+ Site Statistics
+ Search Articles
+ PDF Full Text Service
How our service works
Request PDF Full Text
+ Follow Us
Follow on Facebook
Follow on Twitter
Follow on LinkedIn
+ Subscribe to Site Feeds
Most Shared
PDF Full Text
+ Translate
+ Recently Requested

Risk-adjusted capitation based on the Diagnostic Cost Group Model: an empirical evaluation with health survey information



Risk-adjusted capitation based on the Diagnostic Cost Group Model: an empirical evaluation with health survey information



Health Services Research 33(6): 1727-1744



To evaluate the predictive accuracy of the Diagnostic Cost Group (DCG) model using health survey information. Longitudinal data collected for a sample of members of a Dutch sickness fund. In the Netherlands the sickness funds provide compulsory health insurance coverage for the 60 percent of the population in the lowest income brackets. A demographic model and DCG capitation models are estimated by means of ordinary least squares, with an individual's annual healthcare expenditures in 1994 as the dependent variable. For subgroups based on health survey information, costs predicted by the models are compared with actual costs. Using stepwise regression procedures a subset of relevant survey variables that could improve the predictive accuracy of the three-year DCG model was identified. Capitation models were extended with these variables. For the empirical analysis, panel data of sickness fund members were used that contained demographic information, annual healthcare expenditures, and diagnostic information from hospitalizations for each member. In 1993, a mailed health survey was conducted among a random sample of 15,000 persons in the panel data set, with a 70 percent response rate. The predictive accuracy of the demographic model improves when it is extended with diagnostic information from prior hospitalizations (DCGs). A subset of survey variables further improves the predictive accuracy of the DCG capitation models. The predictable profits and losses based on survey information for the DCG models are smaller than for the demographic model. Most persons with predictable losses based on health survey information were not hospitalized in the preceding year. The use of diagnostic information from prior hospitalizations is a promising option for improving the demographic capitation payment formula. This study suggests that diagnostic information from outpatient utilization is complementary to DCGs in predicting future costs.

Please choose payment method:






(PDF emailed within 1 workday: $29.90)

Accession: 047278566

Download citation: RISBibTeXText

PMID: 10029506


Related references

Health-based risk adjustment: improving the pharmacy-based cost group model by adding diagnostic cost groups. Inquiry 44(4): 469-480, 2008

Health-Based Risk Adjustment: Improving the Pharmacy-Based Cost Group Model by Adding Diagnostic Cost Groups. Inquiry - Journal of Health Care Organization, Provision & Financing 44(4): 469-480, 2007

Risk-adjusted capitation payments: developing a diagnostic cost groups classification for the Dutch situation. Health Policy 45(1): 15-32, 1998

Risk-adjusted capitation rates for children: how useful are the survey-based measures?. Health Services Research 45(6 Pt 2): 1948-1962, 2010

Risk-adjusted capitation in an era of personalized medicine: a dangerous opportunity to bend the health care cost curve. Medical Care 50(8): 633-634, 2012

Clinical Risk Groups (CRGs): a classification system for risk-adjusted capitation-based payment and health care management. Medical Care 42(1): 81-90, 2004

Clinical Risk Groups (Crgs): A Classification System for Risk-Adjusted Capitation-Based Payment and Health Care Management. Medical Care 42(1): 81-90, 2004

Development of a risk-adjusted capitation model based on principal inpatient diagnoses in Taiwan. Journal of the Formosan Medical Association 102(9): 637-643, 2003

An in-depth assessment of a diagnosis-based risk adjustment model based on national health insurance claims: the application of the Johns Hopkins Adjusted Clinical Group case-mix system in Taiwan. Bmc Medicine 8: 7, 2010

Including health status in Medicare's Adjusted Average Per Capita Cost capitation formula. Medical Care 24(3): 259-275, 1986

Risk-based capitation payments for health care: a survey of the literature. Journal of Health Administration Education 5(4): 571-593, 1987

Health-based risk adjustment Improving the pharmacy-based cost group model to reduce gaming possibilities. European Journal of Health Economics 4(2): 107-114, 2003

The development of a risk-adjusted capitation payment system: the Maryland Medicaid model. Journal of Ambulatory Care Management 21(4): 29-52, 1998

Risk-adjusted capitation payment systems for health insurance plans in a competitive market. Expert Review of Pharmacoeconomics and Outcomes Research 3(5): 541-549, 2003

Mandatory pooling as a supplement to risk-adjusted capitation payments in a competitive health insurance market. Social Science and Medicine 47(2): 223-232, 1998