 BOTH SIDES FEEL AS IF THEY HAVE
BEEN TREATED FAIRLY WHILE
GIVING AND RECEIVING
CONCESSION OF EQUAL VALUE

 NEW, UNEXPECTED INFORMATION
 PURPOSE - TO DESTABILIZE AND
CREATE PRESSURE
 COUNTER - KEEP A COOL HEAD AND
EVALUATE THE SITUATION

 UNABLE TO MAKE DECISION OR
CONCESSION
 PURPOSE - TO BUY TIME AND GET
MORE INPUT
 SEE THIRD PARTY - BECOME AGENT
YOURSELF

 ACCEPT ONLY ONE OUTCOME
 PURPOSE - TO FORCE A QUICK
DECISION
 PROVIDE REAL OPTIONS TO STATED
POSITION

 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

 INDICATE POSITION IS ACCEPTED
PRACTICE
 PURPOSE - TO MAKE A POINT NON-
NEGOTIABLE
 CHALLENGE STANDARD/GIVE
EXAMPLE

 LEAVING NEGOTIATIONS
 PURPOSE - TO FORCE THE OTHER
PARTY TO ACT
 WAIT/MAKE A CONCESSION

 NEGOTIATORS ASSUME OPPOSITE
ROLES
 PURPOSE - TO GET ADDITIONAL
INFORMATION REVEALED
 INDICATE AWARENESS OF TACTIC

 REQUESTING BREAKDOWN OF
COSTS
 PURPOSE - TO LOWER THE PRICE
ITEM BY ITEM
 PROVIDE REASONG FOR NO
BREAKDOWN


USE “FEEL/FELT/FOUND”
STATEMENTS
 PURPOSE - TO PROVIDE THIRD-ARTY
SUPPORT
 REALISTICALLY APPRAISE THE
REFERENCE

 PERMIT TRIAL WITHOUT
COMMITMENT
 PURPOSE - TO DEMONSTRATE VALUE
OF THE PRODUCT
 ATTEMPT TO ALSO TRY THE
ALTERNATIVES

 DRAMATIC, NEGATIVE REACTION TO
OFFER
 PURPOSE - TO LOWER THE
EXPECTATIONS OF THE OTHER
PARTY
 REFUSE TO BE INFLUENCED

 USING EXTERNAL, NON-
NEGOTIABLE LIMIT
 PURPOSE- TO ESTABLISH
RANGE/FORCE CONCESSIONS
 CHALLENGE THE LIMITS/CHANGE
THE LOOK OF THE PAYMENTS


“YOU’VE GOT TO DO BETTER THAN
THAT”
 TO FORCE A BETTER OFFER

“HOW MUCH BETTER”

 PRETEND TO HAVE LIMITED
KNOWLEDGE
 PURPOSE - TO DISARMOTHER
PARTY/GAIN FACTS
 OFFER ONLY THE INFORMATION
CALLED FOR

 REACHING DECISIONS ITEM BY ITEM
 PURPOSE - TO REVEAL AGENDA
ITEMS ONE AT A TIME
 ASK FOR THE ENTIRE AGENDA

 ADDING ITEMS WHEN A DECISION IS
CLOSE
 PURPOSE - TO MAKE AN OFFER
MORE APPEALING/CLOSE
 ASSESS THE REAL VALUE OF THE
EXTRA ITEM

 APPROACHING A HIGHER OR A
LOWER LEVEL
 PURPOSE - TO CONTINUE THE
NEGOTIATIONS
 ENSURE THAT NO ADVANTAGE IS
GAINED BY THE ACTION

 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?”

 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?

 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
200
400
600
1,000
COVERED
LIVES
110,000
220,000
330,000
550,000
PCPs
55
110
165
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
O. V.
O.S.
3.015
0.039
$38.2
PMPM
7.88
$119.02
0.39
Imm
IP V
Lab
Base Med
.364
0.107
1.145
$19.48
$81.15
$21.64
0.59
0.72
2.06
$13.31

PCP Capitation
 Base Medical Cost
$13.31
 $15 Office Visit CoPay
 Primary Care Cap
3.77
$ 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 CAPITATION
MONTHLY PREMIUM $120
 Inpatient Hospital
 Outpatient Hospital
 Specialty Care
 Primary Care
$34
$12
 Other Medical
 Administrative/Profit $17
$14
$28
$15

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

UTMB
FALL 2002

 The acquisition and allocation of:
– Fixed Capital
– Equipment Capital
– Human Capital
– Operating Capital

 From the hospital to:
– Ambulatory Care
– Skilled Nursing Facilities
– Home Health
– Physician Office

 The process of setting long-term objectives for the future
 Focus on the budget as it’s main planning tool, management-oriented cost accounting

 Organizational Skills
 Delegating Skills
 Recruitment and Training of
Professional Health Workers

 Drivers of Federal Health Policy
– Federal Budget
– The Public Debt
– Medicare Trust Fund
– State Budgets
– Business Profits and Growth
– The Public Perception of Change

 Fragmented at-risk payment methods
 Medicare-managed care contracting policies

 1970 - Cost Limits
 1980 - HMO and CMP
– Risk Contracting
– Hospital DRGs
– Small Skilled Nursing Facility PPS

 RBRVS Fee Schedule
 CABG Package Pricing Contract
 Skilled Nursing Facility PPS
 Home Health Agency PPS
 Ambulatory Surgery Center PPS

 Open Access
 Four Tiered Pricing of Drugs
 Medicare Select
 Managed Care Reform
 Prompt Pay
 Limited Risk

 Limits on Cost-Based Fee for Service

 Freedom of choice waivers
 Home and community-based services
 Boren Amendment
 Rate-setting Flexibility
 Arizona Medicaid Demonstration

 Prescription drug rebate program
 Medicaid managed care waivers expedited
 Primary Care Case Management
Models - PCCM
 TennCare
 STAR PLUS

 Oversight review of Medicaid managed care
 Purchase co-ops demonstration risk pools
 Elimination of TennCare

 GROUP 10.50 - 12.30
 IPA 10.80 - 15.03
 HOSP 8.61 - 14.02
 PHO 11.90 - 14.94

 MEDICARE 13.06 - 26.00
 MEDICAID 13.44 - 28.00

 MEDICARE 138.12 - 171.32
 COMMERCIAL 29.06 - 55.84

 COMMERCIAL .77 - 3.80

 ALLERGY
 ANESTHESIOLOGY
.19 - 1.37
1.75 - 3.45
 CARDIOLOGY .66 - 1.28
 CARDILOGY INVASIVE .11 - .38
 NONINVASIVE CARDIO .60 - 1.27
 DERMATOLOGY
 ER
.26 - .92
.43 -.70

 ENDOCRINOLOGY
 GI
 GENERAL SURGERY
 HOME HEALTH
 INFECTIOUS DISEASE
 LAB
 NEPHROLOGY
.05 - .26
.28 - .99
1.10 - 2.03
.53 - 2.12
.02 - .09
.36 - 1.13
.04 - .23

 NEUROLOGY
 NEUROSURGERY
 OB/GYN
 ONCOLOGY
 OPHTHLMOLOGY
 ORTHOPEDICS
 OTOLARYNGOLOGY
.20 - .45
.31 - .71
2.77 - 5.28
.17 - 2.69
.32 - 1.42
.68 - 2.09
.63 - 1.65

 PATHOLOGY
 PEDIATRICS
 PHARMACY
 PODIATRY
 PULMONOLOGY
 RHEUMATOLOGY
 UROLOGY
.24 - 2.24
4.38 - 16.50
8.87 - 18.50
.21 - .33
.16 - .41
.08 - .15
.32 - .72

 ALLERGY
 ANESTHESIOLOGY
.05 - .38
4.01 - 5.50
 CARDIOLOGY 5.00 - 8.18
 CARDIOLOGY INVASIVE 2.09 - 3.06
 NONINVASIVE CARDIO 6.04 - 9.10
 DERMATOLOGY
 ENDOCRINOLOGY
1.50 - 4.22
.19 - .28

 GI
 GENERAL SURGERY
 HOME HEALTH
 LAB
 NEPHROLOGY
 NEUROLOGY
 NEUROSURGERY
.74 - 2.80
3.94 - 8.66
12.61 - 28.06
.48 - 2.15
.62 - .99
.81 - 1.51
.80 - 1.46

 OB/GYN
 ONCOLOGY
.85 -2.16
3.19 -5.92
 OPHTHALMOLOGY 5.00 - 9.70
 ORTHOPEDICS 3.10 - 7.60
 OTHOLARYNGOLOGY.72 - 1.64
 PHARMACY
 PHYSICAL MEDICINE
18.88 - 60
.53 - .85

 PODIATRY
 PULMONOLOGY
 RHEUMATOLOGY
 UROLOGY
.40 - 1.41
1.10 - 1.40
.36 - .56
1.85 - 3.69

 CHIROPRACTIC
 AMBULANCE
 NEONATOLOGY
 ORAL SURGERY
 GLOBAL MEDICAID
.07
.25
.18
.22
130.78

 COMMERCIAL
 MEDICARE
142 - 349
800 - 1811

 COMMERCIAL 50 - 160
 MEDICARE 202 - 355

 COMMERCIAL
 MEDICARE
2.30 - 4.50
4.10 - 7.00

 MD
 HOSPITAL
 PER CASE
 AGGREGATE
 PREMIUMS
–
MD
–
HOSPITAL
$10,000 - 75,000
$22,000 - 100,000
$30,000 - 200,000
.52 - 2.41
1.00 - 2.37

 Revenue
–
Premium Revenue
–
Other Revenue
 Operating Expenses
–
Medical Expenses
–
Administrative Expenses
 Retention

 Primary Source of Revenue
 Generally 95% of Revenue
 Effective for a 12 month period

 PPO Access Fees
 COB Recoverable
 Reinsurance Recoverable
 Interest Income

 Paid Claims
 IBNR – Incurred But Not Reported

 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

 Finance
 Sales
 Underwriting
 Member Services
 Provider Services

 Health Status
 Ability to pay premium
 Other coverage
 Historical Persistency

 Physical Examinations
 Individual Medical Questionnaires
 Employer disclosure listing major health conditions
 Medical cost experience
 No Health Status Information – Medicare and Medicaid

 Credit History

 Coordination of Benefits

 Frequent changes of carriers

 Population
 Covered Services
 Cost-Sharing Provisions
 Provider Reimbursement arrangements
 Demographics
 Geographical Area
 Occupation/Industry

 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

 New Plans require $10,000,000 in working capital
 Existing plans
–
Sustained operating losses
– Acquisitions

 Overestimates of enrollment
 Underprojecting medical expenses

 Predatory Pricing or Low Balling
 Overpricing
–
Panic response to previous low-balling
–
Excessive overhead
–
Failure to control utilization properly
–
Adverse selection

 Rapid growth
–
Acquisition
–
No competitor
 Results
–
Rapid expansions in delivery system
–
Service erosion
–
Insufficient claims reserves

 Results
–
Saturation of delivery system
–
Inadequate reserves

 Failure to grow
 Failure to manage the consequences of a flattened or negative growth

 Failure to use underwriting
 Adverse Selection
 Improper Incurred Bur Not Reported
Calculations and Accrual Methods
 Failure to Reconcile Accounts Receivable
 Overextended Management

 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

 Distribution Method
 Other variables impacting medical costs

 Data Characteristics
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Integrity
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Consistency
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Same meaning from provider to provider
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Validity
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Meaningfulness
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Adequate Sample Size

 Health Center, IPA, Provider Organization, or Geographically Related Center
 Individual Physician
 Service or Vendor Type
 Employer Group

 Daily Log
 Monthly Summary

 PCP Encounter rates
 Preventive Care
 Lab Utilization
 Radiology Utilization per visit
 Prescriptions
 Referral Utilization
 Out-of-Network

 Ambulatory procedures
 Ancillary care
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PT
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Podiatry
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Eye Care
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Oral Surgery
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Other

 Collection, collation, and analysis of data to develop provider-specific profiles.
 Initial focus - inpatient care
 Recent shift to outpatient care

 Difficulty in determining who has responsibility.

 Severity of Illness Indicators
 Statistical Manipulation
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Trimming

 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

 Success factors
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Implementation – Speed to market
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Management Tools – Reports, Provider Profiles
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Staff – Adequate staffing ratios for nonphysician practitioners
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Organizational integration – Roles and processes defined

 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

 Member Behavior Change – Method based on behavior change models including learning style,interventions targeted and tailored maintenance strategy
 Physician Behavior changed based on research