Risk Adjustment in Capitation Payments to Primary Care Providers: Does It Matter How We Account for Patients' Socioeconomic Status?

Abstract

Background: One of the critical challenges with capitation payment to primary care providers is ensuring that the fixed payments are equitable and adjusted for expected care needs. Patients of lower socioeconomic status (SES) generally have higher health care need. Sweden developed a Care Needs Index, which is used in the capitation payments to primary care providers to account for patient SES.

Objectives: We aim to examine the potential value of collecting individual-level rather than geographic-level socioeconomic data to support an equitable payment to primary care providers.

Research design: We used data from 3 regional administrative care registers, which cover all consultations in publicly funded health care, and Statistics Sweden's registers covering individual background characteristics. We estimated linear regression models and evaluated the model fit using the adjusted R2 with the Care Needs Index at the individual and at the district level. The population consisted of the 3,490,943 individuals residing in the 3 study regions for whom we had complete data.

Measures: The main outcome variable was the number of face-to-face consultations with a GP or a nurse at a primary care practice. We use the R2 to compare the predictive power of the models.

Results: The share of the variation explained did not depend on whether the Care Needs Index was measured at the individual level or the small area level.

Conclusions: SES explains very little variation in primary care visits, and there is no gain from having individual-level information about the individual's SES compared with having district-level information only.