Question: Part B
1. Prepare different scenarios that assume that you invest in measures to improve revenues and reduce utilization (prepare one that shows you reducing utilization, one that shows you improving revenue, and a third that shows improvement in both
2. Prepare a five year projection of your Hospital internal Revenues and Expenses (again taking into account inflation and membership growth) that assumes you do take the deal and make improvements. As you model ways to improve Plan performance by reducing utilization, be sure that your hospital revenue/expense model reflects the reduced utilization.
Assuming that the ‘right' answer is the one that maximizes net revenue to the IDS, what should you do? Explain why that is your recommendation. Are there any of the assumptions that were made along the way that you'd find fault with? What happens to your modeling if those are wrong?