Effect of conversion from a fee-for-service plan to a capitation reimbursement system on a circumscribed outpatient radiology practice of 20,000 persons

PURPOSE: To assess the effect of a capitation reimbursement plan with attendant changes in service arrangements on the utilization of radiologic services, financially on the payer, and on the satisfaction of patients and referring physicians. MATERIALS AND METHODS: Outpatient radiologic services for a defined population of 20,000 company employees and their dependents were converted from a point-of-service managed care plan to a capitation payment plan. Under the capitation plan, nonemergent outpatient diagnostic imaging was performed at a newly constructed imaging center staffed by general radiologists. All cross-sectional images and certain projectional studies were also over-read (read again after the initial reading by local radiologists) by subspecialists. Utilization data obtained before and after the conversion were analyzed. The financial effect on the employer and the satisfaction of patients and physicians were also assessed. RESULTS: Quality imaging services were provided under the capitation plan with financial savings by the employer. Use was higher for crosssectional imaging, especially magnetic resonance imaging studies, and was lower for nonmammographic plain radiography. Consumer satisfaction was high. CONCLUSION Under certain conditions, conversion to a capitation system for imaging can lead to improved quality of care and decreased overall health-care costs.