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Over the past ten years, healthcare in the United States hs undergone rapid change. The growth of managed care health systems has been dramatic. In 1998, approximately 6.1 million Medicare recipients (16 percent) were enrolled in managed care plans, and in some states enrollment rates were much higher (HCFA, 1998). For example, California has more than 1.4 million people enrolled in some form of managed care, representing 39 percent of the state's elderly. The majority of these managed care plans now accept enrollees on a risk-contracted, capitated basis, with increasing numbers predicted to do so. The Congressional Budget Office estimates that by the year 2000, some ig.+ percent of Medicare beneficiaries will be in risk-contract plans (Lamphere et al., 1997).
In Medicare risk-contract managed care, a health plan agrees to provide all Medicare-covered services to enrollees and, in return, receives a pre-set monthly payment for that "covered life." The amount received varies by geographic region. If the individual's healthcare costs less than the capitated amount, the plan earns a profit.
Capitated payment enables plans to provide healthcare in innovative ways. When appropriate, plans can reorganize services in ways that provide care by nonmedical, and less expensive, personnel. In dementia care, this situation offers a potential opportunity to meet the range ofa family's needs for social services while reducing demands on more expensive health services.
Until the advent of managed care, the scope of dementia treatment by physicians was limited to biological interventions. Physicians operating in their private offices under a fee-for-service model were trained to focus care on medical tests and pharmacological interventions for an identified patient and also had financial incentives to do so. Capitated managed care changes financial incentives and could lead to changes in care.
For people with dementia, care is as much psychological and social as it is medical, and therein lie both the opportunity and the risk for people with dementia in managed health plans. In quality dementia care, the target for intervention is not only the patient, but also the family caregiver, if this person is available. Managed care makes it possible to organize services in such a way that people with dementia and their families receive appropriate, low-cost education and support services like support groups or adult daycare,...