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Does Risk-Adjusted Payment Influence Primary Care Providers' Decision on Where to Set Up Practices?

Anell, Anders LU ; Dackehag, Margareta LU and Dietrichson, Jens (2016) In Working Papers 2016(24).
Abstract
Providing equal access to health care is an important objective in most health care systems. It is especially pertinent in systems like the Swedish primary care market, where providers are free to establish themselves in any part of the country. To improve equity in access to care, 15 out 21 county councils in Sweden have implemented risk-adjusted capitation based on the Care Need Index, which increases capitation to primary care centers with a large share of patients with unfavorable socioeconomic and demographic characteristics. Our aim is to estimate the effects of using care-need adjusted capitation on the supply of private primary care centers. We use a dataset that combines information on all primary care centers in Sweden during... (More)
Providing equal access to health care is an important objective in most health care systems. It is especially pertinent in systems like the Swedish primary care market, where providers are free to establish themselves in any part of the country. To improve equity in access to care, 15 out 21 county councils in Sweden have implemented risk-adjusted capitation based on the Care Need Index, which increases capitation to primary care centers with a large share of patients with unfavorable socioeconomic and demographic characteristics. Our aim is to estimate the effects of using care-need adjusted capitation on the supply of private primary care centers. We use a dataset that combines information on all primary care centers in Sweden during 2005-2013, the payment system and other conditions for establishing new primary care centers used in the county councils, and demographic, geographic, and socioeconomic variables for low level geographic areas. To estimate the effects of care-need adjusted capitation, we use difference-in-differences models, contrasting the development over time between areas with and without risk-adjusted capitation, and with high and low Care Need Index values. Risk-adjusted capitation significantly increase the number of private primary care centers in areas with relatively high Care Need Index values. The adjustment results in a changed distribution of private centers within county councils; the total number of private centers does not increase in county councils using care-need adjusted capitation. The effects are furthermore increasing over the first three years after the implementation of such capitation, and concentrated to the lower and middle range of the group of areas with high index values. Risk-adjusted capitation based on the Care Need Index increases the supply of private primary care centers in areas with unfavorable socioeconomic and demographic characteristics. More generally, this result indicates that risk-adjusted capitation can significantly affect private providers’ establishment decisions. (Less)
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author
organization
publishing date
type
Working Paper
publication status
published
subject
keywords
primary health care, establishment, equal access, private provision, risk-adjusted capitation, Sweden, C10, D04, D20, I11, I14
in
Working Papers
volume
2016
issue
24
pages
37 pages
publisher
Department of Economics, Lund University
language
English
LU publication?
yes
id
657145af-3249-46af-a854-85ba0ff0ff42
alternative location
http://swopec.hhs.se/lunewp/abs/lunewp2016_024.htm
date added to LUP
2016-12-27 13:33:05
date last changed
2016-12-27 13:33:05
@misc{657145af-3249-46af-a854-85ba0ff0ff42,
  abstract     = {Providing equal access to health care is an important objective in most health care systems. It is especially pertinent in systems like the Swedish primary care market, where providers are free to establish themselves in any part of the country. To improve equity in access to care, 15 out 21 county councils in Sweden have implemented risk-adjusted capitation based on the Care Need Index, which increases capitation to primary care centers with a large share of patients with unfavorable socioeconomic and demographic characteristics. Our aim is to estimate the effects of using care-need adjusted capitation on the supply of private primary care centers. We use a dataset that combines information on all primary care centers in Sweden during 2005-2013, the payment system and other conditions for establishing new primary care centers used in the county councils, and demographic, geographic, and socioeconomic variables for low level geographic areas. To estimate the effects of care-need adjusted capitation, we use difference-in-differences models, contrasting the development over time between areas with and without risk-adjusted capitation, and with high and low Care Need Index values. Risk-adjusted capitation significantly increase the number of private primary care centers in areas with relatively high Care Need Index values. The adjustment results in a changed distribution of private centers within county councils; the total number of private centers does not increase in county councils using care-need adjusted capitation. The effects are furthermore increasing over the first three years after the implementation of such capitation, and concentrated to the lower and middle range of the group of areas with high index values. Risk-adjusted capitation based on the Care Need Index increases the supply of private primary care centers in areas with unfavorable socioeconomic and demographic characteristics. More generally, this result indicates that risk-adjusted capitation can significantly affect private providers’ establishment decisions.},
  author       = {Anell, Anders and Dackehag, Margareta and Dietrichson, Jens},
  keyword      = {primary health care,establishment,equal access,private provision,risk-adjusted capitation,Sweden,C10,D04,D20,I11,I14},
  language     = {eng},
  month        = {10},
  note         = {Working Paper},
  number       = {24},
  pages        = {37},
  publisher    = {Department of Economics, Lund University },
  series       = {Working Papers},
  title        = {Does Risk-Adjusted Payment Influence Primary Care Providers' Decision on Where to Set Up Practices?},
  volume       = {2016},
  year         = {2016},
}