Variations in Physician Utilization Patterns in a Capitation Payment IPA-HMO

Health care utilization data, using measures such as rates of hospitalization, physician visits, and specialty referrals, were collected for individual provider offices in an Individual Practice Association-Health Maintenance Organization (IPA-HMO) that used a capitation payment system to reimburse its primary physicians. Variations in health care utilization patterns between IPA offices were identified and examined for possible associations with other characteristics of these medical practices. As on indirect test of the effectiveness of the HMO's incentive system, it was hypothesized that IPA offices with a larger number of HMO subscriber-patients and those with a longer duration of membership in the IPA would exhibit practice patterns that would conform most with the HMO's cost control objectives. Associations were found between health care utilization measures and characteristics such as the specialty of physicians, but size of HMO patient load and length of IPA membership did not have the predicted effect. The findings of this study serve to identify several questions that need to be addressed in further assessments of the performance of IPAs that follow this general model.