Question

5:021 Back Case Study 3 edited.docx Case Study 3: Epidemiology and Financial Management and Part 1: Risk Factors and Capitation Rates (Health Capitation basics Per capita costs are driven by at least 3 factors: population risk, efficiency, and quality of services o These costs can be lowered by enrolling a healthier population (lower population risk), increasing efficiency, or modifying quality. Population risk is the major purpose of epidemiology o Difference between random and systemic variation- and unpredictable acts of God for which the concept of insurance was originally designed o One cannot control or adjust for random variation- only expect and prepare for it. Stop-loss, risk-pooling and reinsurance industry copes with this kind of o SYSTEMIC variation - refers to the potentially characteristics (age, gender, comorbidities) as well as to differences in treatment strategies, provider costs, and treatment location. Beneficiary characteristics and the extent to which these characteristics can predict resource use is a critical question Insurance generally uses a "capitation calculation model to determine risk adjustment to adjust capitation payment to reflect burden of present and future illness. Purpose of risk- playing field with regard to patients and force capitated plans to concentrate on efficiencies and quality of care rather than on the selection of healthier patients o Challenge is to develop a way to risk-adjust capitation by taking into consideration chronic risk factors Group Health East (GHE) decides to incorporate two risk factors into the capitation rates that are charged to area employers. The risk factors are smoking and obesity (defined as a body mass index of at least 30). GHE wants to differentiate between obese members who are physically active versus those who are not. Each of these two risk factors have been linked to coronary heart disease (CHD), and each of these factors can be reduced in a population through behavioral and or pharmaceutical To Do

Answer 1

Case study 3

1, 1,00,000 members of GHE smoking 30%, obese 25%, and physically inactive 20%

2, risk factors: obese, smoking, overweight and physically inactive

3, high blood cholesterol, high blood pressure, diabetes

4, physically inactive, overweight is the additional risk for CHD for smoking and obese

5, by comparing the 10year CHD incidence rates of either smokers or obese GHE members to those with out either of those conditions 20% more likely is CHD among those who either smoke or any obese compared to members who do not smoke or are not obese..

6, 100per 1000 of smokers develop CHD over 10years period, 175 per 1000 would have developed CHD even if they hadn't smoked, 100 per 1000 could be directly attributed to smoking..

7, 20% should develop CHD over the 10years period, 50 per1000have developed CHD even if they were not obese..175per 1000 could be directly attributed to obesity..

9, average cost of $150/visit, if 5members each year 150X 5= 750

$ 750/ visit

10, Average cost of being hospitalized with CHD is about $75,000 and with CHD, average cost of $150/visit..

11, 50% [20+30%] should charge area employees for members who have either of these risk factors..