Capitation, managed care, and chronic obstructive pulmonary disease

Expenditure and utilization patterns of aged Medicare beneficiaries with chronic obstructive respiratory disease (COPD) (n = 42,472) were compared with all Medicare beneficiaries (n = 1,221,615) using a 5% nationally representative sample of aged Medicare beneficiaries participating in the fee-for-service program in 1992. Per capita expenditures for an aged Medicare beneficiary with COPD were 2.4 times the per capita expenditures for all Medicare beneficiaries. The most expensive 10% of Medicare beneficiaries with COPD accounted for nearly half of total expenditures for this population. Higher comorbidity, as measured by the Deyo-adapted Charlson index, was associated with higher expenditures. For Medicare Part B claims, internal medicine accounted for the largest portion of physician expenditures (14%). Per capita expenditures for pulmonologists were 7.5 times higher for beneficiaries with COPD compared with all Medicare beneficiaries. Results from this study suggest that there is a subgroup of individuals with COPD who are likely to be very expensive during the year. Additional analytic studies are needed to more specifically identify characteristics associated with these individuals. As more Medicare beneficiaries enroll in managed care and as physicians are increasingly being paid on a capitated basis this information will be useful to physicians as they monitor the care provided to patients and assess the financial risks they accept under capitation.