1. Culminating discussion on course concepts. (30 points, i.e. 10 points for each sub-part)
On page 22 of the text, Dr. Kongstvedt states, “As significant as the ACA is, it is not the only development of note. The healthcare market continues to evolve, in some cases mirroring events of 15 or more years ago.” For each of the following “events” listed below (from Chapter 1), discuss the potential for success or failure in having impact on total cost of healthcare and defend your position. Incorporate course concepts and terminology (where applicable) in your response.
a) Accountable Care Organizations
b) Physician Employment by Hospitals and Health Plans
c) Narrow Networks
2. Managed Care Case Study. (20 points, i.e. 10 points for each sub-part)
Read the case study below and respond to the questions. Note that this is a situation that I have encountered in my career although “the names have been changed to protect the innocent.”
GOAL: Recapture revenue lost as a result of injectable drugs being redirected to a third-party pharmacy vendor by Omega Health Plan
SITUATION: The Omega Health Plan stated that they have a national agreement with a pharmacy vendor at a rate lower than the standard fee schedule currently in place and therefore Omega is requiring all injectible drugs to be provided through the new vendor.
BACKGROUND:
Dr. Wingo is a rheumatologist who often provides patients within-office injectible drug treatments. Dr. Wingo received a letter from the Omega Health Plan a few months ago stating that within 30 days it would be requiring all injectible drugs over $200.00 to be ordered through a national pharmacy vendor contracted by the health plan. The national pharmacy vendor has apparently offered the Omega Health Plan a rate that is lower than the standard physician fee schedule for injectibledrugs under which Dr. Wingo is currently reimbursed. This has presented many problems for Dr. Wingo, including difficulty managing inventory for drugs he feels must be provided in the office, concerns about quality, and lost revenue.
Dr. Wingo has a 100% mark-up above his cost on all injectibledrugs. The mark-up helps pay for storage, handling, delivery, and administration of the drugs. Payments to Dr. Wingo by Omega Health Plan have averaged 75% of billed charges for both the injectibles as well as for other services. The injectibledrug charges represent about 30% of total charges that Dr. Wingo has billed for Omega Health Plan members.
In the start-up of the pharmacy vendor for injectibles, there have been no errors, but there have been a couple of delivery days which inconvenienced the patients and the office staff who administer the drug, particularly related to scheduling.
There are other rheumatologists in the Omega Health Plan’s network, but none of them practice at the hospital where Dr. Wingo has the majority of his inpatient consultations. Dr. Wingo would argue, however, that the injectable drugs keep patients out of the hospital, so most people he sees in the hospital are new patients and not those currently under treatment.
Answer the following questions from the perspective of Dr. Wingo:
a) Analysis: What is each party’s strength?
b) Recommendation: How will Dr. Wingo convince Omega to allow the injectable drugs to be provided through hispractice rather than the 3rd party vendor? Include something that Dr. Wingo can offer to Omega as part of the negotiation.
3. Managed Care Organization: Payment Models (25 points)
Describe and contrast the following payment models (which Christenson calls “assistance mechanisms”) and their impact onthe development of disruptive business models.
a) Fee-for-service (5 points)
b) Capitation (5 points)
c) Explain why capitation is more impactful than fee-for-service in the development of an integrated health system.(15 points)
4. Managed Care Organization: Administration (25 points)
In June of 2020, the citizens of Oklahoma passed a bill that mandates Medicaid expansion as a constitutional amendment to become effective 7/1/2021. SoonerCare 2.0 was the original model proposed by Governor Stitt. In an amended form, it eventually passed the Oklahoma legislature, but Governor Stitt vetoed the bill, after realizing the potential strain on the state budget due to the increased number of enrollees due to the Medicaid Expansion population. In its place, he directed the Oklahoma Health Care Authority (OHCA) to issue an RFP for managed care organizations to administer Oklahoma Medicaid and Medicaid Expansion. Four plans were selected in January 2021: Blue Cross Blue Shield of Oklahoma, Centene/Oklahoma Complete, Humana, United Healthcare. Meanwhile, many provider organizations have expressed concern about Medicaid administration under the MCO model due to failure of the program 20 years ago (although it can be argued that the failure was not due to MCO administration but to the model as it was designed by OHCA). The provider organizations have gained support in the state legislature for a bill that will require OHCA to implement SoonerCare 2.0, thwarting the plans to implement the MCO model. Assuming that the MCO model is indeed implemented in October, provider organizations need to prepare for the increased number of enrollees who will be covered under Medicaid. Select one of the following categories of MCO operations. As an executive within an integrated delivery system (health care provider), discuss (a) what steps your organization should take to ensure that you have success, and (b) challenges you might encounter. Draw upon your learnings of best practices from the Shortell text, MCO chapters from Kongstevt, and the presentation slides from In-Person #4.
1. Provider Network
2. Utilization Management
3. Quality
Your answer should be approximately ½ page in length, single spaced.
BONUS POINTS. Competency from the course: Describe something from this course that you will be able to apply in your job or career in the future. Site specific content and how it will be used.
