What would be the rate if a utilization management program

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Reference no: EM133492721

Case: Bay Pines Medical Center estimates that a capitated population of 50,000 would have the following base utilization and the total cost characteristics:

Inpatient Days Average Cost
Service Category per 1,000 Enrollees per Day

General 150 $1,500
Surgical 125 1,800
Psychiatric 70 700
Alcohol/Drug abuse 38 500
Maternity 42 1,500
Total 425 $1,367

In addition to medical costs, Bay Pines allocates 10 percent of total premium for administration/reserves.

Question 1: What is the PMPM rate that Bay Pines must set to cover medical cost plus administration expenses?

Question 2: What would be the rate if a utilization management program would reduce utilization within each patient service category by 10%/ By 20%?

Question 3: Return to the initial case utilization assumption. What rate would be set if the average cost on each service were reduced by 10%?

Question 4: Assume that both utilization and cost reductions were made. What would be premium be?

Reference no: EM133492721

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