Task: Capitation, Rate Setting, and Risk Sharing
PROBLEM:
Families First is a managed care plan that has been asked to submit a premium bid to ABC Company, a large manufacturer in its service area. The premium bid includes the primary care for all of the ABC employees. ABC has provided information about the age and gender of its employees, and Families First has identified average primary care utilization rates from its own databases. This information is shown below:
|
ABC Company |
Average Primary Care |
|
Number of |
Number of |
Visits per Year |
| Age Band |
Males |
Females |
Males |
Females |
| 20-29 |
285 |
325 |
2.10 |
3.18 |
| 30-39 |
96 |
100 |
2.60 |
3.52 |
| 40-49 |
53 |
57 |
3.28 |
3.93 |
| 50-59 |
36 |
36 |
4.14 |
4.43 |
| 60+ |
7 |
5 |
4.98 |
5.04 |
Each primary care physician can handle about 3,000 patient visits per year, for which he or she is paid $180,000. What primary care rate (PMPM) will Families First propose to ABC Company?