The Business of Managed Care

1
The Business of Managed Care
2
Plan for Today

• Introduce section of course that focuses on plans
• Internal organization of an HMO
• Overview of managed care industry
• As seen through Interstudy report
• Short team meeting

3
Plan module
4
HMO Organization
5
Functional areas

• Marketing and sales
• Member services
• Provider relations
• Clinical management
• Rating and underwriting (Finance)
• Operations
• Information management

6
For your functional area...

• Does your area focus on internal or external
  clients?
• List and explain your areas main functions
• HINT See subheadings in Knight
• What other areas in the company does yours work
  closely with?

7
Finance Rating and UnderwritingArea

• X Internal External
• Main functions
• Price products
• Price groups
• Monitor revenues, cost, profits
• Works with
• Marketing, Information Management

8
Information ManagementArea

• X Internal X External
• Main functions
• Enrollment/eligibility
• Claims and claims payment
• Referrals
• Hospital authorizations
• Provider payments
• Premium statements
• Medical records
• Member education
• Works with
• Most everyone

9
OperationsArea

• X Internal X External
• Main functions
• Implementing workable and efficient processes
• Streamline enrollment and eligibility processes
• Premium collection and distribution (timing)
• Pay claims accurately and on time
• Claim adjudication (paid, denied, pending)
• Works with
• Marketing
• Provider relations

10
Clinical ManagementArea

• Internal X External
• Main functions
• Referral authorizations
• Pre-certification
• Concurrent review
• Case management
• Works with
• Provider relations
• Operations
• Member services

11
Provider RelationsArea

• X Internal External
• Main functions
• Segregate functions of network development
• Selecting, recruiting and credentialing providers
• Negotiating and re-negotiating provider contracts
• Terminating providers
• Amending provider contracts
• Works with
• Other providers

12
Member Services

• Internal X External
• Main functions
• Member education
• Demand management
• Problem resolution
• Member grievances
• Works with
• Provider relations, marketing, financial services

13
Marketing and Sales

• Internal X External
• Main functions
• Market research
• Product development/teams/testing/implementation
  
• Advertising
• Marketing communications
• Cooperative marketing
• Sales
• Works with
• operations, member services, information
• systems

14
Overview of HMO industry

• 652 plans
• 78.8 million enrollees
• Enrollment grew 7.9 from 7/97 to 7/98
• 41.5 of enrollees in IPAs
• 59.8 of enrollees in federally qualified plans
• 36.3 of enrollees in nonprofit plans

15
Largest National Managed Care Firms

• The Blue Cross Blue Shield Association (13.3
  million)
• Kaiser Foundation Health Plan (8.4 million)
• United Health Care (5.6 million)
• Aetna US Health Care (4.3 million)
• Foundation Health Systems (4.2 million)
• 77 of national HMO enrollment

16
Largest plans by total enrollment

• Kaiser Foundation Health Plan of Northern CA
• Kaiser of Southern CA
• HealthNet - CA
• PacifiCare - CA
• California Care - CA

17
Largest plans by Medicare enrollment

• PacifiCare - CA
• Kaiser of No. CA
• Humana Medical Plan - FL
• Kaiser of So. CA
• Health Net - CA

18
Largest plans by Medicaid enrollment

• Triple-S, Inc. - Puerto Rico
• Tennessee Managed Care Network
• Human Health Plans - PR
• California Care
• Health Net - CA

19
HMOs in Pennsylvania

• Penetration rate is 30.9
• Just about the national average
• 22 plans

20
Pittsburgh, Pennsylvania

• 10 plans
• HMO penetration rate 25.5
• HMO enrollment 597,933
• Keystone Health Plan West
• Total state enrollment is 342,754
• For profit
• Affiliated with Blue Cross and Blue Shield

21
Checkpoint 2

• Show that you understand different types of
  plans, including differences and similarities
• Show you understand how and why different types
  suit different people
• Justify your choice by comparing it to other
  alternatives
• Demonstrate that you consulted provider
  directories