The Economic Impact of Capitated Care for High Utilizers of Public Mental Health Services

The Los Angeles PARTNERS Program Experience

by Kanika Kapur, Alexander Young, Dennis Murata, Greer Sullivan, Paul Koegel

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Los Angeles PARTNERS is a treatment program that uses capitation to shift risk for treatment costs of high utilizers of public mental health services to private community based treatment organizations. This analysis reveals two important findings from PARTNERS. First, the economic incentives created by capitation contributed to the disenrollment of PARTNERS clients; furthermore, factors such as not speaking English or Spanish or being schizophrenic increased the probability of disenrollment. Second, analyses of health costs for enrollees in the PARTNERS capitation program suggest that the program did not result in a change in total costs. However, the program increased the use of community based care and also increased treatment costs for clients with lower pre-program costs, but decreased costs for the clients with high pre-program costs. These results suggest that future capitation programs for this severely ill population would benefit from using detailed clinical information to determine program eligibility and to set risk adjusted capitation rates.

The Journal of Behavioral Health Services & Research, Vol. 26, No. 4, 1999, pp. 416-429. Copyright © 1999 Sage Publications.

Originally published in: The Journal of Behavioral Health Services & Research, Vol. 26, No. 4, 1999, pp. 416-429.

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