Discussion:
Review the Health Care Economics Issues HMO Simulation.
Select either Constructit or E-editor to analyze for your paper.
Prepare a 500 word paper in which you present a profile of the chosen company, including the demographics of the employees, the health care risk factors or potential areas of high utilization, and the premiums the company is willing to pay.
As a representative of Castor Insurance, your job is to maximize profit and minimize risk for the company. Based on your analysis of potential utilization, provide at least two reasons why each plan could be selected. Then state which plan you would select to sell to your chosen company. What are the reasons for this decision? Why did you not select the other plans offered?
Understanding Economic Issues for HMOs
Health Maintenance Organizations (HMOs) and their enrollees are two important players in the market for health care. Since the market for health care is different from markets for other commodities-due to aspects such as uncertainty on the supply and the demand side, asymmetric information, and adverse selection and moral hazard-decision-making for HMOs is also more complex than in the case of other commodities.