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Guidelines clarify managed care accounting procedures.

Two new documents offer guidance for accounting issues involved in managed care programs. The American Institute of Certified Public Accountants' Statement of Position 89-5 and HFMA's Principles and Practices Board Statement No. 11 address risk contracting from the perspective of the managed care program and the healthcare provider, respectively. One key issue addressed in the documents is the timing of expense recognition of the costs of providing health services to members of managed care plans.

Accounting↗

Who gains and who loses with community rating for small business?

This paper compares community rating with experience rating for small businesses using a microsimulation model to determine what firms offer and who within these firms purchases insurance. We generate four years of data and find that our results are remarkably stable through time. Both offer and purchase rates are about five percentage points higher under experience rating, but community rating leads to more stable offerings. Under community rating, high-risk firms and families purchase insurance, whereas under experience rating, it is the low-risk firms and families who are the purchasers. Young families and poor families have the lowest purchase rates, with these rates being disproportionately low under community rating.

Age Factors↗

Placing the incentive on quality through contact capitation.

Contact capitation is emerging as a reimbursement method of choice among capitated physician networks. It allows for a more equitable allocation of dollars and permits physicians to benefit financially from the savings they individually create through more effective, efficient care practices. However, in order to operate at peak efficiency, the contact capitation system should be designed with thorough and ongoing input from the participating physicians.

Capitation Fee↗

The evolution of hospitalist programs.

In just a few years, hospitalist programs have evolved to a third generation, affording key participants an opportunity to reduce inpatient healthcare costs. Because the method of inpatient payment determines the economic winners and losers in the program, the key participants will benefit from the implementation of a program that includes shared incentives. Even though reduced payments for inpatient services might be offset by reduced variable costs for hospitals and increased office revenues for primary care physicians, a hospitalist program is more likely to achieve sustained success if it is structured so that financial rewards are distributed fairly among the participants.

Contract Services↗