Capitation Payment for Pharmacy Services: I. Impact on Drug Use and Pharmacist Dispensing Behavior

Results of a two-county pilot study in Iowa revealed that capitation may have significant advantages over fee-for-service (FFS) reimbursement in the Medicaid drug program. Consequently, the capitation program was expanded to 32 counties on April 1, 1981 and continued through December 31, 1981. Anoth...

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Bibliographic Details
Published in:Medical care 1984-08, Vol.22 (8), p.737-745
Main Authors: Yesalis, Charles E., Lipson, David P., Norwood, G. Joseph, Helling, Dennis K., Burmeister, Leon F., Jones, Mark E., Fisher, Wayne P.
Format: Article
Language:English
Subjects:
Attitude of Health Personnel
Capitation Fee
Censuses
Drug Interactions
Drug prescriptions
Drug Prescriptions - economics
Drug Utilization - economics
Fees and Charges
Health care payments
Humans
Insurance, Pharmaceutical Services
Iowa
Medicaid
Medicaid - economics
Medical treatment
Nonprescription drugs
Pharmacies
Pharmacists
Physicians
Pilot Projects
Prescription drugs
Professional Practice
Prospective Payment System
Urban Population
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Summary:Results of a two-county pilot study in Iowa revealed that capitation may have significant advantages over fee-for-service (FFS) reimbursement in the Medicaid drug program. Consequently, the capitation program was expanded to 32 counties on April 1, 1981 and continued through December 31, 1981. Another 32 counties were used as part of a before: after/experimental: control design. Pharmacists were paid 80% of projected drug expenditures in advance based on the types of Medicaid eligibles who chose them as their providers. The remaining 20% was withheld in an escrow account to be used for supplemental, emergency, and bonus payments. Pharmacists who participated in this experiment were guaranteed that their gross profits on Medicaid prescriptions would remain at least equal to what they would have been if they had remained under the current FFS payment system. Major differences in drug use levels and pharmacist dispensing behavior under capitation financing were observed in the pilot study. However, no such changes associated with payment type were noted in the expanded program. Relative to these findings, a discussion of pharmacist attitudes is presented.
ISSN:0025-7079
1537-1948
DOI:10.1097/00005650-198408000-00005