Adjusting capitation rates using objective health measures and prior utilization

Health Care Financ Rev. Spring 1989;10(3):41-54.


Several analysts have proposed adding adjusters based on health status and prior utilization to the adjusted average per capita cost formula. The authors estimate how well such adjusters predict annual medical expenditures among non-elderly adults. Both measures substantially improve on the variables currently used. If only health measures are added, 20-30 percent of the predictable variance is explained; if only prior use is added, more than 40 percent is explained; if both are added, about 60 percent is explained. The results support including some measure of use in the formula until better health measures are developed.

Publication types

  • Research Support, Non-U.S. Gov't
  • Research Support, U.S. Gov't, Non-P.H.S.

MeSH terms

  • Actuarial Analysis
  • Aged
  • Capitation Fee / standards*
  • Data Collection
  • Demography
  • Fees and Charges / standards*
  • Health Expenditures / statistics & numerical data*
  • Health Maintenance Organizations / statistics & numerical data*
  • Health Status*
  • Health*
  • Humans
  • Medicare / statistics & numerical data*
  • Models, Statistical
  • Probability
  • United States