Is the Risk Really Shared? A Retrospective Analysis of Healthcare Costs of Patients With Type 2 Diabetes Mellitus on a Capitation Model

Abstract

ObjectivesPrivate managed healthcare organizations in South Africa (SA) use a capitation model of care for patients within their healthcare delivery systems for the optimal management of type 2 diabetes mellitus (T2DM) to reduce healthcare costs. Few studies have categorized healthcare costs at a patient level to determine the actual healthcare costs incurred by private insurers for T2DM in SA. This study estimated the direct medical costs of patients with T2DM registered with a private health insurer over a 5-year period between 2 funding models: a capitated risk-sharing model (CM) versus a traditional fee-for-service (FFS) model. MethodsThis population-based cohort study used retrospective claims data of patients with T2DM from 2012 to 2016 of a private medical scheme in SA. Annual healthcare costs of T2DM were assessed. ResultsDuring the 5-year period, most of the identified patients with T2DM were enrolled in CM—534 (64%) of 828 in 2012, which rose to 789 (81%) of 971 in 2016. The median annual healthcare costs of the treatment and management of the patients with T2DM was significantly higher in CM ($2002 [interquartile range (IQR) 2106] in 2012 to $1095 [IQR 1042] in 2016) than FFS ($582 [IQR 772] to $296 [IQR 507]) (P<.0001). A total of 46 patients with T2DM incurred hospitalization costs of ≥$24 243 for a T2DM or other event; 33 were enrolled on CM. ConclusionsThe patients with T2DM on CM accrue significantly higher annual healthcare costs than patients on FFS. The greatest portion of the overall T2DM healthcare costs was associated with high-cost hospitalization of T2DM complications.