win/win negotiations l both sides feel as if they have been treated fairly while giving and...
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WIN/WIN NEGOTIATIONS BOTH SIDES FEEL AS IF THEY HAVE
BEEN TREATED FAIRLY WHILE GIVING AND RECEIVING CONCESSION OF EQUAL VALUE
NEGOTIATION STRATEGIES AND TACITCS
SURPRISE NEW, UNEXPECTED INFORMATION PURPOSE - TO DESTABILIZE AND
CREATE PRESSURE COUNTER - KEEP A COOL HEAD AND
EVALUATE THE SITUATION
AGENT OF LIMITED AUTHORITY
UNABLE TO MAKE DECISION OR CONCESSION
PURPOSE - TO BUY TIME AND GET MORE INPUT
SEE THIRD PARTY - BECOME AGENT YOURSELF
ULTIMATUM ACCEPT ONLY ONE OUTCOME PURPOSE - TO FORCE A QUICK
DECISION PROVIDE REAL OPTIONS TO STATED
POSITION
REDUCTION TO THE RIDICULOUS
USE OF MANIPULATIONS OR GIMMICKS TO MAKE SITUATION LOOK DIFFERENT
PURPOSE - TO MAKE POSITION APPEAR TO BE MORE REASONABLE
ANALYZE ALL ITEMS USING THE SAME CRITERIA
POLICY OR PROCEDURE INDICATE POSITION IS ACCEPTED
PRACTICE PURPOSE - TO MAKE A POINT NON-
NEGOTIABLE CHALLENGE STANDARD/GIVE
EXAMPLE
WALKOUT LEAVING NEGOTIATIONS PURPOSE - TO FORCE THE OTHER
PARTY TO ACT WAIT/MAKE A CONCESSION
GOOD GUY/BAD GUY NEGOTIATORS ASSUME OPPOSITE
ROLES PURPOSE - TO GET ADDITIONAL
INFORMATION REVEALED INDICATE AWARENESS OF TACTIC
ITEMIZATION REQUESTING BREAKDOWN OF
COSTS PURPOSE - TO LOWER THE PRICE
ITEM BY ITEM PROVIDE REASONG FOR NO
BREAKDOWN
REFERENCE USE “FEEL/FELT/FOUND”
STATEMENTS PURPOSE - TO PROVIDE THIRD-ARTY
SUPPORT REALISTICALLY APPRAISE THE
REFERENCE
“TRY IT, YOU’LL LIKE IT” PERMIT TRIAL WITHOUT
COMMITMENT PURPOSE - TO DEMONSTRATE
VALUE OF THE PRODUCT ATTEMPT TO ALSO TRY THE
ALTERNATIVES
FLINCHING DRAMATIC, NEGATIVE REACTION TO
OFFER PURPOSE - TO LOWER THE
EXPECTATIONS OF THE OTHER PARTY
REFUSE TO BE INFLUENCED
BUDGET CONSTRAINTS USING EXTERNAL, NON-
NEGOTIABLE LIMIT PURPOSE- TO ESTABLISH
RANGE/FORCE CONCESSIONS CHALLENGE THE LIMITS/CHANGE
THE LOOK OF THE PAYMENTS
DISBELIEF “YOU’VE GOT TO DO BETTER THAN
THAT” TO FORCE A BETTER OFFER “HOW MUCH BETTER”
PLAYING DUMB PRETEND TO HAVE LIMITED
KNOWLEDGE PURPOSE - TO DISARMOTHER
PARTY/GAIN FACTS OFFER ONLY THE INFORMATION
CALLED FOR
MEASURED APPROACH REACHING DECISIONS ITEM BY ITEM PURPOSE - TO REVEAL AGENDA
ITEMS ONE AT A TIME ASK FOR THE ENTIRE AGENDA
QUICK CLOSE ADDING ITEMS WHEN A DECISION IS
CLOSE PURPOSE - TO MAKE AN OFFER
MORE APPEALING/CLOSE ASSESS THE REAL VALUE OF THE
EXTRA ITEM
CHANGING LEVELS APPROACHING A HIGHER OR A
LOWER LEVEL PURPOSE - TO CONTINUE THE
NEGOTIATIONS ENSURE THAT NO ADVANTAGE IS
GAINED BY THE ACTION
REASONS FOR ASKING QUESTIONS
TO GET INFORMATION TO LEAD OR MOLD THINKING
“WHAT IF..?” TO STALL “WHY DO YOU SAY THAT?” TO DETERMINE POSTIONS “IF YOU COULD, WOULD YOU..?”
TO MAKE A STATEMENT “ISN’T THAT WHAT WE BOTH WANT TO
ACHIEVE?”
GOOD NEGOTATING QUESTIONS
WHAT DO YOU HAVE IN MIND? DO I KNOW EVERYTHING I SHOULD
ABOUT THIS? WHAT WOULD IT TAK TO..? WHAT ELSE? WHAT IF I COULD..?
YOU’VE TOLD ME WHAT YOU WANT.
WHAT DO YOU NEED? WHAT’S IN IT FOR ME? WHERE WILL YOU COMPROMICE? COULD YOU REPEAT THAT OFFER?
ALTERNATIVE WHEN ASKED A QUESTION
WHY DO YOU ASK THAT? BEFORE I ANSWER THAT, TELL ME… WHAT I HEAR YOU SAYING IS… WHAT EXACTLY DO YOU MEAN? REMAIN SILENT - WHEN THE OTER
PARTY BECOMES UNCOMFORTABLE, HE OR SHE WILL BEGIN TALKING AGAIN.
Managed Care
Health Maintenance Organizations - HMOs
Staff Model Group Practice Model Network Model IPA Model Direct Contracting Model Provider Sponsored Organization
STAFF MODEL
Closed Panel MDs As Employees Greater Degree of Control Over
Practice Patterns Convenience of One-Stop Shopping More Costly to Develop and Implement Limited Choice of Participating
Physicians
STAFF MODEL (con’t)
Productivity Problems Examples
– FHP
– KAISER
GROUP MODEL
Multispecialty Physician Group Captive Group Independent Group Greater Degree of Control of Physicians Lower Capital Needs Than Staff Model
Group Model (con’t)
Limited Choice of Physicians Marketing Difficulties Lack of Accessibility Examples
– MacGregor
– University Medical Group
– Kelsey
Network Model
Contracts With More Than One Group Practice
Either Closed or Open Panel Plans Overcomes Marketing Disadvantage More Limited Physician Panel Than IPA
or Direct Contracting Model
IPA MODEL
Hospital Based IPA Model All Inclusive Capitation Requires Less Capital Broad Choice of Participating
Physicians Creates an Organization Forum for
Physicians to Negotiate with HMOs
IPA MODEL (con’t)
More Difficult Utilization Management Examples
– North American Medical Management
– FPA
– Heritage
DIRECT CONTRACTING
Requires Less Capital Broad Choice of Participating
Physicians Does Not Create an Organization
Forum for Physicians to Negotiate HMO Assumes Additional Financial
Risk Relative to IPA
DIRECT CONTRACTING
More Difficult to Recruit Physicians Utilization Management More Difficulty
Preferred Provider Organization
Select Provider Panel Negotiated Payment Rates Rapid Payment Terms Utilization Management Consumer Choice
OPEN ACCESS HMO
30 States Currently Have Specialty Capitation Impact On Utilization Consumer Choice Texas - OB/GYN
EXCLUSIVE PROVIDER ORGANIZATION
Limited Choice Gatekeeper ERISA Regulated
POINT OF SERVICE PLAN
PCP Capitation Withholds Gatekeeper Limited Out of Network Coverage
INDEMNITY COVERAGE
High Deductibles High CoInsurance 65 -84 % Steerage of Patients MSAs
SELF INSURED PLANS
ERISA Exemption Administrative Service Organization
ASO Third Party Administrator TPA
SPECIALTY HMOs
Mental Health/Chemical Dependence Dental TCH HMO
MANAGED CARE OVERLAYS TO INDEMNITY
Utilization Management Specialty Utilization Management Catastrophic Case Management Worker’s Compensation Utilization
Management
PRIMARY CARE NETWORK
BEDS COVEREDLIVES
PCPs
200 110,000 55
400 220,000 110
600 330,000 165
1,000 550,000 275
RISK CONTRACTING
A basis for all insurance Aligns responsibility and accountability A way of sharing risks across a
population rather than individual by individual
The cap rate is a function of both the predicted frequency and predicted unit cost of services
Risk Contracting (con’t)
Providers risk $$ loss if costs are higher than predicted and stand to make $$ if costs are lower than predicted
The higher the volume of patients the better the chance of predictable expenses and average spread of risk
PCP requires at least 150 enrollees and global capitation requires at least 10,000
CAPITATION
A fixed amount is paid to the provider each month for the care of a specified number of patients. If actual costs exceed the total sum, no additional Moines are paid. If actual costs are less than the total sum paid, the provider keeps the surplus Moines.
Capitation requires a specific population
CAPITATION
When a provider or group of providers is capitated for care, all patients are required to use that provider or group. No coverage is provided if patients go out of the network.
PREMUIM SPLIT
HMO
– Marketing
– Employer Billing
– Eligibility
– Out of Area Coverage
– Transplant/AIDS Pool
PREMIUM SPLIT (con’t)
IPA or Physician Group
– All physicians services, inpatient and outpatient
– Outpatient diagnostic services and treatment
PREMIUM SPLIT (con’t)
Hospital
– All inpatient hospital services
– Home Health
– Ambulatory Surgery
– Skilled Nursing Facility
– Durable Medical Equipment
– ER facility fees
ACTUARIAL CONCEPTS
Premium rate is set by first calculating the “medical expense” components
1. Assumptions are made of the expected utilization of specific areas of care
2. Average rate per each service is determined.
3. After multiplying the above 2 factors, the copayment amount is then adjusted
ACTURIAL CONCEPTS
4. This equals the net PMPM amount in the premium for the specific area of care
The full premium equals the total medical expense plus and administrative “load”.
A specified area or service, I.e., PCP services, can be separated out to develop a capitation figure.
PCP Capitation
Service Frequency Cost PMPMO. V. 3.015 $38.2 7.88O.S. 0.039 $119.02 0.39Imm .364 $19.48 0.59IP V 0.107 $81.15 0.72Lab 1.145 $21.64 2.06Base Med $13.31
PCP Capitation
Base Medical Cost $13.31
$15 Office Visit CoPay 3.77
Primary Care Cap $ 9.54
GATEKEEPERS
PCPs: FP,GP,IM,PED, GYN Eye Care - Optometrist Worker’s Comp - Physiatrist Dental Care - General Dentists MH/CD - MSWs
CAPITATION DON’T
Don’t enter into capitation contracts without getting advice from experienced managers
Don’t accept a cap rate unless you know you can live with it
Don’t enter a capiation contract unless you are committed and able to monitor the utilization and have confidence in sub-contractors.
CAPITATION DON’TS
Don’t accept risk for costs you or the group cannot control such as tertiary care or new technologies
Don’t tolerate an adversarial relationship with the payor.
CHALLENGES TO PROVIDERS
Competitive costs Capability to accept/manage risk Creation of a balanced delivery system Lower administrative costs Information Management Negotiation Skills
KEYS TO CAPITATION ANALYSIS
1. What services are covered under the capitation rate?
2. Are there limits to the risk?
– Reinsurance- specific, aggregate
– Low enrollment guarantee
KEYS (con’t)
3. What utilization and cost targets were utilized in building the capitation rate? Are these comparable to your experience?
4. How does the capitation compare to fee-for-service charges?
5. What are the underwriting or UM guidelines?
KEYS (con’t)
6. What are the incentives for effective performance?
7. Is the payment structure to providers appropriate to live within the capitation?
CONTACT CAPITATION
Customer based fixed payment for services over a specified time period.– Referral based: count the number of
unique patients in a given time period PERIOD.
– Diagnosis/Point based: referral based but modified by acuity, severity..Points or weights assigned to specific diagnosis
– Other: case rates, DRG’s, ASC rates
TYPICAL CAPITATIONMONTHLY PREMIUM $120
Inpatient Hospital $34 Outpatient Hospital $14 Specialty Care $28 Primary Care $12 Other Medical $15 Administrative/Profit$17
PHYSICIAN CAPITATION
Provide or arrange for medical services 24 hours a day
Patient management & Consultations Hospital & Nursing home visits Pediatric and adult immunizations Initial child care/well care Outpatient diagnostic services
PHYSICIAN CAPITATION
Office surgery In area urgent and emergent care Anesthesia Health education Telephone consultation Physical, speech & occupational
therapy
HOSPITAL CAPITATION
Hospital facility costs Skilled nursing services Home Health Surgery facility costs Prosthetics/durable medical equipment Ambulance Chemo/radiation therapy & agents
OTHER MEDICAL POOL
Prescription drugs Vision services Dental services Mental Health & substance abuse
services Out-of area emergency & urgent care Kidney dialysis
OTHER MEDICAL POOL
Transplants Expenses above stop/loss levels
ADMINISTRATIVE POOL
Marketing Membership maintenance/servicing Claims administration Provider servicing UR/QA management Finance/Reporting/Systems
Management Retention
RESOURCES NEEDS CHANGE
Drop inpatient days to 200 - 225 commercial, 1,100- 1,200 for Medicare
Reduce Specialist Referrals by 25% Reduce average length of stay to 2.9
days Increase physician visits by 15% Employ weekend social workers to
expedite discharge
RESOURCE CHANGES
PCPs stay in office and see patients - stop hospital work- employ physician extenders
Employ full-time physicians on-site at hospital to manage all enrollee care - Medical Intensivist
Employ mental health “gatekeepers” to reduce psychiatric admissions
RESOURCE CHANGES
Conduct physician house calls to avoid inpatient stays
Reduce ER non-emergency visits, telephone triage, fast track ER, telemedicine
Chronic disease management -- Asthma, CHF, Diabetes
Improve access to care
Models of Integration
Physician Hospital Organization Management Service Organization Group Practice Without Walls Integrated Provider Medical Foundation
Physician Hospital Organization
A legal entity owned by both a hospital and a group of physicians. Its primary purpose is obtaining payor contracts.
PHO
Payor requirements of the PHO
– Strong PCP base
– Strong utilization management
– Inclusion of only select specialists with a track record of efficient, quality care
PHO
Determinations to make before setting up a PHO
– What are we selling?
– To whom are we selling?
– What is the likelihood we will sell enough to survive?
PHO Advantages
Serves as an excellent first stage model Requires less capital investment May create a vehicle for global
capitation
PHO Disadvantages
Less integration than a Medical Foundation or Integrated Medical Group
Since it is not fully integrated, creates antitrust risk
Potential for working inefficiency with super majority requirement
PHO Physician Strategies
PHO Risk
– Willing to take risk
– Not willing to take risk PHO Capabilities
– Contract a subset
– Grant power of attorney
PHO Physician Strategies
Market to self insured employers Market to managed care Market to other networks Physicians only take risk Both physicians and hospital take risk Develop an IPA subset of PHO
IPA
Multi-specialty Single Specialty Specialty
– Workers Comp
– Ethnic
– Other
IPA
Ownership– Physicians– Management Company– Physicians and third party (hospitals,
management company, venture capitalist) Funding
– Physicians Only– Physicians and third party
MSOs
Provided by hospitals Provided by third party payors Provided by other outside entities Provided by the physician group itself
MSO Purposes
To fund the IPA To use as PR tool for physicians
recruitment To act as precursor to group practice
without walls To reduce the administrative cost for
the group
Group Practice Without Walls
A formal legal organization that bills under one provider number (75% of revenue through a common billing number) and provides certain core administrative and management services to physicians who maintain separate individual offices
GPWW
Purpose Allow independent physicians access to benefits of group practice without full integration.
Ownership Independent physicians ownership
GPWW
Focus of activity– Geographic dispersed physician network– Provide for adequate physician
compensation and retirement benefits– Reduce physician cost of business– Use as base for accomplishing medical
staff development goals– Ownership of some ancillary services
GPWW
Functions
– Managed Care Contracting
– Joint Ventures
– Physician Support Services
– Group Practice Development
– Practice Management
– Ancillary Services
GPWW
Structure– Owned by participating physicians and can
be organized as a professional medical corporation or as a medical partnership. It is operated for profit. Legal requirements:• Incorporation• Stock structure and bylaws• Legal arrangement between the GPWW
and physicians joining the group
GPWW
Legal Issues
– Common Billing
– Merging of practice not purchase of assets
– Retirement Plan Sec. 414 IRS Code
GPWW
Types
– United - The new group practice owns and manages the hard assets of the practice along with all business operations. Physicians are employees and shareholders in the newly formed group practice.
GPWW
Administrative– Physicians retain their assets and
ownership in their practices, but pay monthly dues for core group of services provided by and administrative services office. These services include group purchasing, collections, billings, payroll, and personnel.
GPWW
Advantages– Greater autonomy to physicians– Less capital investment required of
physicians– Potential cost savings through economies
of scale– Physicians able to retain certain benefits of
multi-specialty group practice
GPWW
Advantages– Provides vehicle of succession for various
medical practices within the GPWW– Physicians maintain their individual
locations and facilities– Good transitional form between individual
practice and fully integrated group practice– Provides opportunity for revenue
enhancement
GPWW
Disadvantages
– May raise issues under Sec 414 of IRS Code
– Practices remain compartmentalized
Antitrust issues
MANAGED CARE
UTMB
FALL 2002
RESOURCE PLANNING
The acquisition and allocation of:– Fixed Capital– Equipment Capital– Human Capital– Operating Capital
THE SHIFTING OF ATTENTION From the hospital to:
– Ambulatory Care– Skilled Nursing Facilities– Home Health– Physician Office
FINANCIAL PLANNING
STRATEGIC PLANNING
The process of setting long-term objectives for the future
Focus on the budget as it’s main planning tool, management-oriented cost accounting
KEY MANAGEMENT SKILLS
Organizational Skills Delegating Skills Recruitment and Training of
Professional Health Workers
HEALTHCARE REFORM
Drivers of Federal Health Policy– Federal Budget– The Public Debt– Medicare Trust Fund– State Budgets– Business Profits and Growth– The Public Perception of Change
MEDICARE PAYMENT POLICIES Fragmented at-risk payment methods Medicare-managed care contracting
policies
FEE FOR SERVICE TO CAPITATION 1970 - Cost Limits 1980 - HMO and CMP
– Risk Contracting– Hospital DRGs– Small Skilled Nursing Facility PPS
1990s
RBRVS Fee Schedule CABG Package Pricing Contract Skilled Nursing Facility PPS Home Health Agency PPS Ambulatory Surgery Center PPS
2002
Open Access Four Tiered Pricing of Drugs Medicare Select Managed Care Reform Prompt Pay Limited Risk
MEDICAID MANAGED CARE PAYMENT POLICIES
1970s
Limits on Cost-Based Fee for Service
1980s
Freedom of choice waivers Home and community-based services Boren Amendment Rate-setting Flexibility Arizona Medicaid Demonstration
1990s
Prescription drug rebate program Medicaid managed care waivers
expedited Primary Care Case Management
Models - PCCM TennCare STAR PLUS
2002
Oversight review of Medicaid managed care
Purchase co-ops demonstration risk pools
Elimination of TennCare
CAPITATION RATES
PRIMARY CARE
GROUP 10.50 - 12.30 IPA 10.80 - 15.03 HOSP 8.61 - 14.02 PHO 11.90 - 14.94
PRIMARY CARE
MEDICARE 13.06 - 26.00 MEDICAID 13.44 - 28.00
PROFESSIONAL
MEDICARE 138.12 - 171.32
COMMERCIAL 29.06 - 55.84
MENTAL HEALTH
COMMERCIAL .77 - 3.80
SPECIALTY COMMERCIAL
ALLERGY .19 - 1.37 ANESTHESIOLOGY 1.75 - 3.45 CARDIOLOGY .66 - 1.28 CARDILOGY INVASIVE .11 - .38 NONINVASIVE CARDIO .60 - 1.27 DERMATOLOGY .26 - .92 ER .43 -.70
SPECIALTY COMMERCIAL
ENDOCRINOLOGY .05 - .26 GI .28 - .99 GENERAL SURGERY 1.10 - 2.03 HOME HEALTH .53 - 2.12 INFECTIOUS DISEASE .02 - .09 LAB .36 - 1.13 NEPHROLOGY .04 - .23
SPECIALTY COMMERCIAL
NEUROLOGY .20 - .45 NEUROSURGERY .31 - .71 OB/GYN 2.77 - 5.28 ONCOLOGY .17 - 2.69 OPHTHLMOLOGY .32 - 1.42 ORTHOPEDICS .68 - 2.09 OTOLARYNGOLOGY .63 - 1.65
SPECIALTY COMMERCIAL
PATHOLOGY .24 - 2.24 PEDIATRICS 4.38 - 16.50 PHARMACY 8.87 - 18.50 PODIATRY .21 - .33 PULMONOLOGY .16 - .41 RHEUMATOLOGY .08 - .15 UROLOGY .32 - .72
SPECIALTY MEDICARE
ALLERGY .05 - .38 ANESTHESIOLOGY 4.01 - 5.50 CARDIOLOGY 5.00 - 8.18 CARDIOLOGY INVASIVE 2.09 - 3.06 NONINVASIVE CARDIO 6.04 - 9.10 DERMATOLOGY 1.50 - 4.22 ENDOCRINOLOGY .19 - .28
SPECIALTY MEDICARE
GI .74 - 2.80 GENERAL SURGERY 3.94 - 8.66 HOME HEALTH 12.61 - 28.06 LAB .48 - 2.15 NEPHROLOGY .62 - .99 NEUROLOGY .81 - 1.51 NEUROSURGERY .80 - 1.46
SPECIALTY MEDICARE
OB/GYN .85 -2.16 ONCOLOGY 3.19 -5.92 OPHTHALMOLOGY 5.00 - 9.70 ORTHOPEDICS 3.10 - 7.60 OTHOLARYNGOLOGY .72 - 1.64 PHARMACY 18.88 - 60 PHYSICAL MEDICINE .53 - .85
SPECIALTY MEDICARE
PODIATRY .40 - 1.41 PULMONOLOGY 1.10 -
1.40 RHEUMATOLOGY .36 - .56 UROLOGY 1.85 -
3.69
ANECDOTES COMMERCIAL
CHIROPRACTIC .07 AMBULANCE .25 NEONATOLOGY .18 ORAL SURGERY .22 GLOBAL MEDICAID 130.78
DAYS PER 1,000
COMMERCIAL 142 - 349 MEDICARE 800 - 1811
ADMITS PER 1,000
COMMERCIAL 50 - 160 MEDICARE 202 - 355
LOS
COMMERCIAL 2.30 - 4.50 MEDICARE 4.10 - 7.00
STOP LOSS
MD $10,000 - 75,000 HOSPITAL PER CASE $22,000 - 100,000 AGGREGATE $30,000 - 200,000 PREMIUMS
– MD .52 - 2.41– HOSPITAL 1.00 - 2.37
Finance
Financial Statement
Revenue– Premium Revenue– Other Revenue
Operating Expenses– Medical Expenses– Administrative Expenses
Retention
Premium Revenue
Primary Source of Revenue Generally 95% of Revenue Effective for a 12 month period
Other Revenue
PPO Access Fees COB Recoverable Reinsurance Recoverable Interest Income
Medical Expenses
Paid Claims IBNR – Incurred But Not Reported
IBNR Factors
Significant changes in enrollment Unusual or large claims Changes in pricing or product design Seasonal utilization or reporting patterns Claim processing backlog Major changes to the provider network or
reimbursement methods
Administrative Expenses
Finance Sales Underwriting Member Services Provider Services
Underwriting
Underwriting Considers
Health Status Ability to pay premium Other coverage Historical Persistency
Health Status
Physical Examinations Individual Medical Questionnaires Employer disclosure listing major health
conditions Medical cost experience No Health Status Information – Medicare
and Medicaid
Ability to Pay
Credit History
Other Coverage
Coordination of Benefits
Historical Persistency
Frequent changes of carriers
Base Rate Development
Population Covered Services Cost-Sharing Provisions Provider Reimbursement arrangements Demographics Geographical Area Occupation/Industry
Base Rate Development [con’t]
Health Status Degree of Health care management Coverage effective date Out-of-Network Usage Use of pre-existing condition clauses Underwriting Practices Claims administration practices
Common Operational Problems
Undercapitalization
New Plans require $10,000,000 in working capital
Existing plans– Sustained operating losses– Acquisitions
Unrealistic Projections
Overestimates of enrollment Underprojecting medical expenses
Pricing
Predatory Pricing or Low Balling Overpricing
– Panic response to previous low-balling– Excessive overhead– Failure to control utilization properly– Adverse selection
Uncontrolled Growth
Rapid growth– Acquisition– No competitor
Results– Rapid expansions in delivery system– Service erosion– Insufficient claims reserves
Uncontrolled Growth
Results– Saturation of delivery system– Inadequate reserves
Failure to Manage a Reduction in Growth Failure to grow Failure to manage the consequences of a
flattened or negative growth
Other Issues
Failure to use underwriting Adverse Selection Improper Incurred Bur Not Reported
Calculations and Accrual Methods Failure to Reconcile Accounts Receivable Overextended Management
Other Issues
Failure of Management to Produce or Understand Reports
Failure to Track Correctly Medical Costs and Utilization
Systems Inability to Manage the Business Failure to Educate and Reeducate Providers Failure to Deal with Difficult or
Noncompliant Providers
Base Rate Development [don’t]
Distribution Method Other variables impacting medical costs
Using Data in Medical Management Data Characteristics
– Integrity– Consistency– Same meaning from provider to provider– Validity– Meaningfulness– Adequate Sample Size
LEVELS
Health Center, IPA, Provider Organization, or Geographically Related Center
Individual Physician Service or Vendor Type Employer Group
HOSPITAL UTILIZATION REPORTS Daily Log Monthly Summary
OUTPATIENT UTILIZATION
PCP Encounter rates Preventive Care Lab Utilization Radiology Utilization per visit Prescriptions Referral Utilization Out-of-Network
OUTPATIENT [CON’T]
Ambulatory procedures Ancillary care
– PT– Podiatry– Eye Care– Oral Surgery– Other
PROVIDER PROFILING
Collection, collation, and analysis of data to develop provider-specific profiles.
Initial focus - inpatient care Recent shift to outpatient care
Episodes of Care
Difficulty in determining who has responsibility.
Adjusting for Severity and Case Mix Severity of Illness Indicators Statistical Manipulation
– Trimming
Comparing the Results of Profiling Plan Average Results IPA, POD, or IDS Specialty or peer group Peer group adjusted for age, sex and case
mix/severity of illness Budget Feedback
Disease Management
Success factors– Implementation – Speed to market– Management Tools – Reports, Provider Profiles– Staff – Adequate staffing ratios for
nonphysician practitioners– Organizational integration – Roles and
processes defined
Disease Management [con’t]
Marketing and Sales – Regional and National distribution
Targeting Tools – Optimal use of data Stratification Tools – Customized
interventions for optimal outcomes Guideline Validity – High quality of
evidence
Disease Management [con’t]
Member Behavior Change – Method based on behavior change models including learning style,interventions targeted and tailored maintenance strategy
Physician Behavior changed based on research