Implementing capitation of medicaid mental health services in Colorado: Is “readiness” a necessary condition?

  • Joan R. Bloom
  • Kelly Devers
  • Neal T. Wallace
  • Nancy Wilson
Brief Reports


Two consortia of community mental health centers in Colorado varied in their administrative readiness for changing to a capitated system and, ultimately, implemented capitation using different organizational arrangements. The objective was to assess the impact of this natural experiment on administrative change, costs, and utilization of services during the first two years postcapitation. Prior to capitation, one was rated as having greater “readiness” than the other and received a capitation contract from the state, while the other did not. A private, for-profit managed behavioral health organization was awarded a contract and formed a joint venture with the less “ready” consortium, providing managed care expertise to complement the consortium's expertise in delivering mental health services. Two years later, these consortia do not look different either administratively or in their patterns of service utilization and costs. These findings suggest alternative ways of successfully implementing a capitated public mental health system.


Mental Health Mental Health Service Service Utilization Behavioral Health Community Mental Health 
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Copyright information

© Association of Behavioral Healthcare Management 2000

Authors and Affiliations

  • Joan R. Bloom
    • 1
  • Kelly Devers
    • 2
  • Neal T. Wallace
    • 3
  • Nancy Wilson
    • 4
  1. 1.Health Policy and ManagementUniversity of CaliforniaBerkeley, Berkeley
  2. 2.the Center for Studying Health System ChangeUSA
  3. 3.the Mark Hatfield School of Public PolicyPortland State UniversityUSA
  4. 4.Mental Health ServicesState of ColoradoUSA

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