Providers lack knowledge about risk

A national study of trends in managed care capitation and risk transfer between health plans and providers reveals that more than 30% of those surveyed admit to having little understanding of the level of risk for which they have contracted.

A large percentage of providers are completely unaware of the type of reinsurance coverage they carry to insure against their risk, according to a report in The Managed Care Indicator.

The Managed Care Indicator is published by Evergreen Re, a consultant and broker of reinsurance to the managed care industry with offices in Stuart, FL, Edina, MN, and Richmond, VA.

Despite this lack of knowledge, providers attribute 36% of their revenue to capitated contracts and expect this trend to continue over the next five years.

Two-thirds of those currently in capitated contracts say they will seek out an average of 2.6 new contracts this year. One-third of organizations not currently accepting capitated members will sign an average of 1.9 new contracts in 1999.

Over the next five years, survey participants say, capitated revenue is predicted to reach 47%, an increase of 11% over 1998.

The survey included administrators from 161 physician groups (multispecialty and single- specialty) and 161 hospitals with 200 beds or more in managed care markets throughout the nation with 30% or greater HMO penetration.