This essay focuses on reductions in utilization or pricing .Before beginning work on this assignment, please review the expanded grading.
Before beginning work on this assignment, please review the expanded grading
rubric for specific instructions relating to content and formatting.
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:
Service Category Inpatient Days
per 1,000 Enrollees
General 150 $1,500
Surgical 125 $1,800
Psychiatric 70 $700
Alcohol/Drug Abuse 38 $500
Maternity 42 $1,500
Total 425 $1,367
In addition to medical costs, Bay Pines allocates 10 percent of the total premium
On the basis of your data analysis, respond to the following;
Firstly, What is the PMPM rate that Bay Pines must set to cover medical costs plus
Secondly, 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
Thirdly, Consider the initial base case utilization assumption. What rate would be
set if the average cost on each service were reduced by 10 percent?
Further, Assume that both utilization and cost reductions were made. What would
the premium be?
To support your work, use your course and textbook readings and also use the
South University Online Library. As in all assignments, cite your sources in your
work and provide references for the citations in APA format.
Firstly, Your assignment should be addressed in an 8- to 10-page document.
Secondly, Submit your document to this appropriate Submissions Area by the due