Does Capitation Affect the Health of the Chronically Mentally III? Results From a Randomized Trial

Objective. —To determine the effect on health outcomes of enrollment of chronically mentally ill Medicaid recipients in prepaid plans vs traditional fee-for-service Medicaid. Design. —A randomized controlled trial. Clients who were randomly assigned to prepaid care were then permitted to choose among four capitated health plans. Clients returned to fee-for-service care at the end of the demonstration. Setting. —The Medicaid Demonstration Project in Hennepin County, Minnesota, the urban center of which is Minneapolis. Patients. —Seven hundred thirty-nine Medicaid clients who were classified as having chronic mental illness on the basis of Medicaid claims. Clients were interviewed at baseline (time 1) and at two follow-up points. Data were available for 96% of participants at the end of the intervention (time 2). Average duration of follow-up was 11 months. A subset of 370 clients with schizophrenia was followed up 11 months after the return of the prepaid group to fee-for-service care (time 3). Main Outcome Measures. —General health status, physical functioning, social functioning, and psychiatric symptoms, assessed using the Schedule of Affective Disorders and Schizophrenia—Change version, the Global Assessment Scale, and indicators of community function. Results. —No significant differences between prepaid and fee-for-service groups in general health or psychiatric symptoms from baseline to time 2. After regression adjustment, 12% fewer clients in the prepaid group reported being victimized (P<.01). At the end of time 3, the regression-adjusted Global Assessment Scale scores had worsened by 7.6 points more in the prepaid group in comparison with the fee-for-service group (P<.02). Conclusion. —There was no consistent evidence of harmful effects of enrolling chronically mentally ill Medicaid clients in prepaid care, at least in the short run. The generalizability of these findings may be limited to plans that control utilization by methods similar to those used in this study setting. Longer-term outcome studies should be undertaken to clarify the strength of the findings.