Capitation puts lid on use but not geographic variation

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 - healthcare cost

Capitation appeared to lower the use of cardiac procedures but it didn’t rein in regional variation. The findings, published July 10 in JAMA, underscore the need to identify drivers behind variation, the authors wrote.

Most studies that evaluate geographic variation in clinical practice focus on Medicare fee-for-service (FFS) beneficiaries. Daniel D. Matlock, MD, of the University of Colorado Denver School of Medicine in Aurora, and colleagues wanted to explore whether being covered under the Medicare Advantage capitated plan would affect usage and variation.

“Because evolving payment policy including accountable care organizations emphasizes capitation, it is critical that the effects of capitation on health care utilization be better understood,” they wrote.

For their study, they compared overall and local area rates for coronary angiography, PCI and CABG in FFS and Medicare Advantage beneficiaries from 2003 to 2007. They used Medicare enrollment databases and the Cardiovascular Research Network to identify more than 5 million FFS patients and nearly 900,000 Medicare Advantage patients. Patients were between 65 and 99 years old and lived within hospital referral region (HRR) areas that included at least 6,000 Cardiovascular Research Network Medicare Advantage patients.

Overall, Medicare Advantage patients compared with FFS patients had modestly lower rates of diabetes, hyperlipidemia and prior coronary disease; lower adjusted procedure rates per 1,000 person years for angiography (16.5 percent vs. 25.9 percent), PCI (6.8 percent vs. 9.8 percent) and similar rates for CABG (3.1 vs. 3.4 percent). There were no differences in rates for urgent angiography and PCI.

But rates in both groups varied widely geographically. Angiography rates for Medicare Advantage patients ranged from 9.8 percent to 40.6 percent and for FFS patients from 15.7 percent to 44.3 percent; for PCI, 3.5 percent to 16.8 percent and 4.7 percent to 16.1 percent; and for CABG, 1.5 percent to 6.1 percent and 2.5 percent to 6 percent.

They attributed most of the variation between regions for angiography and PCI to variations in nonurgent procedures.

“We found that rates of angiography and PCI were significantly lower among Medicare Advantage beneficiaries, whereas the rates for CABG surgery were not significantly different,” Matlock et al wrote. “We also found that cardiovascular procedure rates varied widely at the HRR level among Medicare Advantage beneficiaries and among Medicare FFS beneficiaries.”

They proposed that their findings show the need for further research to better understand if the differences in utilization rates between FFS and Medicare Advantage are due to population characteristics or more efficient or overly restrictive use of resources.

“The degree of regional variation was similar for Medicare Advantage and Medicare FFS beneficiaries, suggesting that factors beyond payment mechanisms influence practice variations,” the researchers pointed out; they suggested evaluating factors such as physician supply, capacity, practice cultures and appropriate use, which they could not assess in their study. They also could not adjust for smoking, which they acknowledged was a key risk factor for coronary artery disease.

“Although in this study capitation was associated with lower procedure rates for angiography and PCI, the substantial geographic variation that remained despite the reimbursement structure suggests that capitation alone may not lead to reductions in the wide variations seen in use of cardiovascular procedures,” Matlock et al concluded.