A simple objective method for determining a percent standard in mixed reimbursement systems

Reimbursing insurance carriers: the case of 'MUFACE' in the Spanish health care system

This article aims at contributing to the analysis of financial incentives in managed competition, on the basis of the literature on procurement and regulation under incomplete information. More specifically, we focus on MUFACE, the publicly funded health care system for Spanish civil servants and dependants. MUFACE makes up an internal market, where competing public and private insurers are reimbursed a flat capitation payment. Some of our results are that theoretically, both pre-contractual (adverse) selection of insurers contracted by MUFACE, and post-contractual risk selection of enrollees undertaken by insurers, should occur under flat capitation.

A risk-based prospective payment system that integrates patient, hospital and national costs

We suggest that a desirable form for prospective payment for inpatient care is hospital average cost plus a linear combination of individual patient and national average cost. When the coefficients are chosen to minimize mean squared error loss between payment and costs, the payment has efficiency and access incentives. The coefficient multiplying patient costs is a hospital specific measure of financial risk of the patient. Access is promoted since providers receive higher reimbursements for risky, high cost patients. Historical cost data can be used to obtain estimates of payment parameters. The method is applied to Medicare data on psychiatric inpatients.