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Health care organization and incentives under emerging models of elderly health care.

Health providers are rapidly establishing integrated delivery systems to prepare for managed care and capitation. However, acute and primary services for the elderly continue to be reimbursed through DRGs or fee-for-service (FFS) payments. Different incentives and care patterns are described for providers caring for elderly populations and younger, capitated groups. Pilot programs to provide Medicare services to the elderly may become models or foundations for a future, capitated health system for the elderly. Existing models of elderly health care that receive capitated payments are described in this article, including Social HMOs, TEFRA HMOs. and PACE programs. The potential significance of these programs for the synchrony of operational incentives, comprehensiveness of health care, volume of institutional services, and primary care orientation is analyzed.