Outcome for People With Schizophrenia Before and After Medicaid Capitation at a Community Agency in Colorado

OBJECTIVE: To investigate the effect of a capitated funding mechanism for the psychiatric care of Medicaid recipients, a study of outcome, satisfaction, and service utilization among adults with schizophrenia and schizoaffective disorder was conducted at a Colorado agency before and after the introduction of the new funding mechanism. METHODS: Two random samples of 100 clients each were selected, one a year before capitation was introduced and one a year after. Subjects were interviewed about their quality of life, needs, and service satisfaction. Psychopathology and service utilization were also measured. RESULTS: Psychopathology was lower after capitation in most dimensions. The number of subjects admitted to the hospital during a six-month period beginning a year after capitation was 57 percent lower than in the equivalent period before capitation, with no increase in the amount of outpatient treatment provided. Subjects reported improved quality of life in the domains of work, finances, and social relations. Significant changes in needs or service satisfaction were not detected. CONCLUSIONS: No evidence was found that Medicaid capitation had an adverse effect on the client population after one year. Findings suggested that capitation led to an efficient use of treatment resources.