Case Analysis: Selling a Medicaid Managed Care Company
By [Your Name Here] The following is a discussion and analysis for case study #1, “Selling a Medicaid Managed Care Company,” to be found in Multisector Casebook in Health Administration, Leadership, and Management (Musch, 2013, pp. 16-18). This case study focuses on the situation of Sunlight Health Plan, a healthcare company situated in Kings County, New York that focuses on the needs of residents of the county who enjoy low to moderate levels of income. As is the case with many healthcare providers today, Sunlight Health Plan is having difficulty maintaining its financial viability as a corporation in the long run. This case study explores some of the reasons contributing to Sunlight
Furthermore, Sunlight Health Plan has an even higher (relatively speaking) administrative loss ratio ranging between 13% and 18%. The combination of these two figures suggests that Sunlight Health Plan can ever only hope to break even at best in terms of the company’s operating expenses and fiscal income. Thus, Sunlight Health Plan must significantly restructure the way it conducts its operations in order for it to continue serving the generally underserved residents of Kings
However, while this solution is certainly more preferable than the solution of doing nothing, it too runs into serious problems in terms of implementation. Sunlight Health Plan does not have the luxury of attempting to expand its target demographic, since the mandate under which Sunlight Health Plan operates specifically limits the organization to Medicaid eligible residents living in Kings County. While it could theoretically increase the number of people subscribing to its program, such an increase would not bring in any additional money to the program, since an increase in the number of members from the uniquely paramaterized socioeconomic demographic which Sunlight Health Plan serves would not correspond to a more favorable consolidated medical loss ratio. Nor does Sunlight Health Plan have the luxury of renegotiating several of its contracts with specialty service providers. Although such a renegotiation could potentially result in a more effective and beneficial consolidated medical loss ratio for Sunlight Health Plan, the complexities of New York regulatory law concerning the operations of medical services make such a renegotiation to be an overly byzantine effort which would likely cost even more in the legal fees necessary to bring it about as it would save for the Sunlight Health Plan in the long
Membership Services (MSD) at Kaiser Permanente used to be a modest department of sixty staff. However, over the past few years the department has doubled in size, creating minor departmental reorganization. In addition the increase of departmental staffing, several challenges became apparent. The changes included primary job function, as well as the introduction of new network system software which slowed down the processes of other departments. These departments included Claims (who pay the bills for service providers outside of the Kaiser Permanente network), and Patient Business Services (who send invoices to members for services received within Kaiser Permanente). Due to the unforeseen challenges created by the system upgrade, it was decided that MSD would process the calls for both of the affected departments. Unfortunately, this created a catastrophic event of MSD receiving numerous phone calls from upset members—who had received bills a year after the service had been provided. The average Monday call volume had risen from 1,800 to 2,600 calls per day. The average handling time for each phone call had risen as well—from an acceptable standard of 5.6 minutes to an unfavorable 7.2 minutes. The department continued to be kept inundated with these types of calls for the two years that these changes have been effect.
In addition to this business plan, we must also address the financial issues plaguing this organization. To illustrate some of these issues lets look at some of the trends here at OCB and within our Industry: For example, OCB’s clinic operations profitability in 1990 was 60%, and now in 1996 our profitability is only 37%, which is down 23 percentage points! We can blame some of this on rising costs of overhead, consumables, etc, however this is happening as the industry as a whole is growing 5% annually, and as our customer base, largely senior citizens, population is growing at almost 1% as year. We should be capitalizing on these industry trends, however, as you all know, not all the trends work in our favor. For example, our lifeblood, the Insurance company’s managed care organizations, and government healthcare reimbursement programs shows a downward trend of allowable payments for our services (DRGs) For example in 1995 the DRG price of ...
The current health care landscape has been characterized by large scale consolidation and vertical integration of payers and providers. This has led to a handful of dominate players with substantial influence, and an increasing overlap in responsibilities between payers and providers. Although payers and providers have traditionally been on opposing sides, battling each other about quality of care versus cost-effective care, they are shifting to working together to achieve better value.
Integrated Managed Care Organization- The organization is properly aligned for the primary driver being cost cutting services. Since all entities within the organization are responsible and affected by any expenses endured on any entity being unfavorable or favorable, the foundation serves as a primary motivator to reduce costs at all levels. This alignment eliminates any financial gains from driving high utilization of services or higher intensity services within the organization. Ultimately, this system allows the physician medical group to drive patient care, being responsible for the clinical care decisions as opposed to health plan making those decisions as designed in other organizations. This is the preferable model for Medicaid
Health Care workers are constantly faced with legal and ethical issues every day during the course of their work. It is important that the health care workers have a clear understanding of these legal and ethical issues that they will face (1). In the case study analysed key legal and ethical issues arise during the initial decision-making of the incident, when the second ambulance crew arrived, throughout the treatment and during the transfer of patient to the hospital. The ethical issues in this case can be described as what the paramedic believes is the right thing to do for the patient and the legal issues control what the law describes that the paramedic should do in this situation (2, 3). It is therefore important that paramedics also
The health care organization with which I am familiar and involved is Kaiser Permanente where I work as an Emergency Room Registered Nurse and later promoted to management. Kaiser Permanente was founded in 1945, is the nation’s largest not-for-profit health plan, serving 9.1 million members, with headquarters in Oakland, California. At Kaiser Permanente, physicians are responsible for medical decisions, continuously developing and refining medical practices to ensure that care is delivered in the most effective manner possible. Kaiser Permanente combines a nonprofit insurance plan with its own hospitals and clinics, is the kind of holistic health system that President Obama’s health care law encourages. It still operates in a half-dozen states from Maryland to Hawaii and is looking to expand...
McFarlan, F. Warren. CareGroup. Ed. Robert D. Austin. N.p.: Harvard Business School, 2005. 1-22. Print.
Throughout this book, author Robert Welch demonstrates values of compassion, caution, and knowledge. These values interweave in Welch’s explanations of how the healthcare system of this country has so much money invested in it, and yet, manage patients receive so little care. This country has a healthcare system that is currently operating out of a broken model that does not place value on individual health, but on profit incentive.
Another downfall to HMO coverage is selective-contracting. This is a process where hospitals deny treatment to patients because their...
The concept of Health Insurance and managed health care the inventions of the twentieth century that were started as prepaid health care. The early insurance concept was merely a way for people to pay medical bills not a way of protecting individual financial assets as the case is today. Overall the health care industry has endured significant changes since its inception.
Medicaid is a broken system that is largely failing to serve its beneficiary’s needs. Despite its chronic failures to deliver quality health care, Medicaid is seemingly running up a gigantic tab for tax payers (Frogue, 2003). Medicaid’s budget woes are secondary to its insignificant structure, leaving its beneficiaries with limited choices, when arranging for their own health care. Instead, regulations are set in order to drive costs down; instead of allowing Medicaid beneficiaries free rein to choose whom they will seek care from (Frogue, 2003)
The rapid growth of managed care is the response to limited financial resources and the demand for healthcare services to be affordable. Economic viability is a crucial aspect of health care. Managed care plans were developed to provided health care services, but also to be a method to collect payment for services. There are different types of managed care plans. For example, health maintenance organization (HMO), preferred provider organization (PPO), and point-of-service (POS) plans. For brevity of this paper the HMO managed care system will be discussed along with the relevance of the role of the advance practitioner practicing in HMO setting.
Many residents in the United States receive healthcare through various forms, such as insurance’s, Medicaid or Medicare. Medicaid is health care for the low income including children, pregnant women, disabled, blind and elders (Adams). According to the Congressional Budget Office there are about 51 million people that are covered by Medicaid and also it the largest drain on state budgets (Adams). Most countries have some type of form of health care they provide, for example, Japan is a democratic country that provide health care, but is different from other countries. There are also many interest groups that either agree or disagree with expanding Medicaid. The New Hampshire (NH) Community Behavioral Health Association and the American Association of Retired Persons (AARP) are two of the many interest groups that are in favor of expanding Medicaid’s spending, as well as RTI International. However, Ohio Right to Life and Cleveland Right to Life are interest groups that oppose the expansion of Medicaid.
Crowley, Ryan A., and William Golden. "Health Policy Basics: Medicaid Expansion." Annals Of Internal Medicine 160.6 (2014): 423-426. Academic Search Complete. Web. 18 Apr. 2014.
Medicine, medical supplies, and medical treatment are multi-billion dollar industries crucial to the wellbeing of the public. Doctors and other members of the health-care industry do their best to provide excellent care for the nation’s sick and injured, while scientists and researchers work to develop new drugs and technologies to fight disease. We often view medical care as a basic human right; something that all persons, rich or poor, should have access to in times of need. But despite our notions of what healthcare should be, those who make a living in this industry, specifically owners of firms, must contend with the same economic questions facing businesses in any industry. To learn more about this vast service industry, I interviewed Dr. Martin Slez, a dentist/oral surgeon and owner of a medical practice that provides both general care and specialized treatments for oral diseases. Of the topics discussed, firm goals, pricing, costs, and technology stood out as particularly interesting and unique facets of the organization, as they differed considerably from those in other industries.