The purpose of this article is to describe the impact of a capitated community-care demonstration in Illinois that attempted to increase the range of services provided while constraining overall costs. The authors examined the implementation and outcomes, using pretest and posttest measures of client satisfaction, range of services, agency costs, and nursing home admissions. Demonstration clients (n = 752) had a mean age of 80, and an average of two activities of daily living impairments. The number of covered services increased from 3 at baseline to 14 during the demonstration, whereas the mean number of services used increased from 1 to 2.5. Satisfaction with care remained stable and agency average costs declined. The capitation rate more closely approximated agency costs than customary fee-for-service (FFS) and provided a fixed deductible for clients. No difference was seen in nursing home admissions compared to clients served under FFS in the same geographic location. These results imply that capitation increased the range of covered services, maintained client satisfaction, increased efficiency, and did not affect rate of nursing home admissions. Capitated home- and community-based services needs to be tested in other locations and with other providers.
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