Homework
Consider the following data and make your best analysis of per member per month (PMPM) rates, considering reductions in utilization or pricing. Bay Pines Medical Center estimates that a capitated population of 50,000 would have the following base case utilization and total cost characteristics:
In addition to medical costs, Bay Pines allocates 10 percent of the total premium for administration/reserves.
On the basis of your data analysis, respond to the following:
a. What is the PMPM rate that Bay Pines must set to cover medical costs plus administrative expenses?
b. What would be the rate if a utilization management program were to reduce utilization within each patient service category by 10 percent? And by 20 percent?
c. Consider the initial base case utilization assumption. What rate would be set if the average cost on each service were reduced by 10 percent?
d. Assume that both utilization and cost reductions were made. What would the premium be?
Format your homework according to the give formatting requirements:
a. The answer must be double spaced, typed, using Times New Roman font (size 12), with one-inch margins on all sides.
b. The response also includes a cover page containing the title of the homework, the course title, the student's name, and the date. The cover page is not included in the required page length.
c. Also include a reference page. The references and Citations should follow APA format. The reference page is not included in the required page length.