Managed-care plans provide nearly 20% of revenues at Illinois hospitals on average, a new report by the Illinois Hospital and HealthSystems Association said.
On average, 24% of urban hospitals' revenues come from managed care, while rural hospitals get 11% of revenues from managed care. The average hospital had 28 contracts with 16 managed-care plans or companies.
The report, Managed Care in Illinois Hospitals, is based on 1994 and 1995 data from 118 of the 200 hospitals and healthcare systems in the state.
"Hospitals are transforming their operational processes, but it's only in the first stage," said Jo Ellen Mistarz, IHHA director of managed care, who wrote the report. "They are now forming provider networks, undertaking direct contracts with employers and accepting risk for capitation."
Thus far, Illinois hospitals have been focused on integration. Forty-five percent of the small hospitals that responded, those with 200 or fewer beds, were part of a multihospital system. Ninety-five percent of the larger hospitals that responded, those with more than 200 beds, are part of an "integrated or multihospital system."
However, the spread of managed care is forcing hospitals to link with physicians. Forty-two percent of Illinois hospitals are part of a physician-hospital organization. Of the remaining 58% that aren't involved in a PHO, half said they would be within the year.
"PHOs appeared to be a key contracting vehicle for capitation," Mistarz said. "Another 45% of the respondents have discounted fee-for-service contracts with employers. Those were pretty healthy numbers, which surprised us a bit."
However, capitation, which pays providers a fixed payment for services in a defined benefit package, hasn't caught fire as a trend for Illinois hospitals, the report indicates. Some 83% of Illinois hospitals don't have any fully capitated admissions. Of the less than 20% that do have fully capitated admissions, most are in the state's major metropolitan areas of Chicago and across the Mississippi River from St. Louis.