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

OBJECTIVES Private 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. METHODS This 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. RESULTS During 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