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Summary Financial Recourse Management in Healthcare.docx C428 Financial Recourse Management in Healthcare- C428 Performance Assessment RCP1-Task 1 A1. As Chief Financial Officer of Seamus Company, the decision to move away from a fee-for-service model towar$5.49
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Summary Financial Recourse Management in Healthcare.docx C428 Financial Recourse Management in Healthcare- C428 Performance Assessment RCP1-Task 1 A1. As Chief Financial Officer of Seamus Company, the decision to move away from a fee-for-service model towar
Financial Recourse Management in H C428 Financial Recourse Management in Healthcare- C428 Performance Assessment RCP1-Task 1 A1. As Chief Financial Officer of Seamus Company, the decision to move away from a fee-for-service model towards a managed care organization has been reviewed. To suppo...
financial recourse management in healthcaredocx c428 financial recourse management in healthcare c428 performance assessment rcp1 task 1 a1 as chief financial officer of seamus company
C428
Financial Recourse Management in Healthcare- C428
Performance Assessment RCP1-Task 1
A1. As Chief Financial Officer of Seamus Company, the decision to move away from a fee-
for-service model towards a managed care organization has been reviewed. To support the
company goals, the proposed managed care strategies are as followed: Preferred Provider
Organization, Health Maintenance Organization, and Exclusive Provider Organization.
The first of the three fiscally sustainable strategies are the Preferred Provider
Organization (PPO). Preferred Provider Organization is a combination of cost-saving
strategies like a Health Maintenance Organization, but with some additional features of the
traditional insurance plans. When choosing a PPO plan, the recipient is allowed to select his
or her own providers, however beneficiaries are encouraged to use providers that take part in
the plan. This approach is a cost sharing strategy that encourages members to visit participant
physicians within the PPO plan, although not enforced. This is how an organization has the
ability to cut healthcare costs is by coming to an agreement with assigned providers. A
preferred provider pays an increased cost share for services that are provided within the
network rather than those services provided outside the network, which may result in higher
premiums and employees’ deductibles. That is why a Preferred Provider Organization costs
tend to be more expensive verses other insurance plans.
Another strategy is the Health Maintenance Organization (HMO). Health Maintenance
Organization is one of the most popular insurance plans. It can be organized either as public
or private entities. HMO was developed to encourage healthier lifestyles as well as
preventive medicine, which will consequently reduce the overall healthcare costs and
hospital admission rates. Unlike its Preferred Provider Organization counterpart, an HMO
plan designates the participant with his or her primary care physician. This is just one of
several methods that an employer can do in order to control costs. In a Health Maintenance
Organization, an employer pays a flat rate monthly premium for services and employees pay
smaller co-payments. Since participates are assigned their primary care physician (PCP), the
physician has the responsibility for the overall medical needs of the patient. If beneficiaries
are in need of care, they must first seek his or her PCP first, however if an issue is beyond the
PCP expertise, the PCP will refer the beneficiaries to the appropriate physician within HMO
network. This helps keep costs very low for both the organization and its members. The final sustainable strategy is the Exclusive Provider Organization (EPO). Exclusive
Provider Organization can be considered a mixture of the HMO and PPO plans. Within this insurance plan are contracted physicians and hospitals to whom the EPO has arranged
discounted rates to offer its beneficiaries. Exclusive Provider Organization offers an array of
health services such as doctors, hospitals, specialists, x-rays, laboratory, pharmacies, and
more. Under an EPO plan, a participant has to seek care exclusively by the network providers
or risk out of pockets expenses. There is however one exception to that rule and that would
be in an emergency situation such as stroke or heart attack. An EPO makes things simpler to
see a specialist; this is because the plan typically does not require members to have a referral
from his or her primary doctor. This unique feature sets itself apart from the Health
Maintenance Organization. Unlike PPO members, EPO members lower costs by negotiating
rates within the network, which results in lower premium and monthly payments. This
concept can be advantageous to an employee’s benefit package and a highly desirable offer
from an employer stand point. This is very enticing for members because of the flexibility
and freedom to see physicians while maintaining a feasible budget.
A1a. While discerning which system will succeed the current fee-for-service health plan,
Seamus has to review the cost-saving measures, tax deductions, and fiscal management
improvements of each managed care organization. In reviewing the cost-saving measures of
the managed care organizations, an EPO is the better way to go. However, all MCO plans
exhibit cost-saving characteristics. With all three sustainable strategies comes lower
deductibles and fixed premiums. With the lower deductibles and fixed premiums, Seamus
can create more innovative ways to reduce costs. Keeping costs low can be achieved by
negotiating service rates with the insurance companies, therefore driving costs down. Accompanying all the suggested insurance plans are some tax advantages. Here we will
discuss those advantages. One of many benefits for businesses include, but not limited to, tax
credit and business expense deductions. What the tax credit companies receive is typically
based on a sliding scale. This means the smaller the company is, the more credit the company
receives; ultimately putting more money back into Seamus pockets. Another benefit that can
aid Seamus in achieving their vision is the business expense deduction. The business expense
deduction is when an employer’s health insurance premiums are exceeding the total credits.
With these deductions, Seamus can have better control over their financial budgets and help
Seamus accomplish and leverage costs.
Another area that needs to be reviewed before selecting an insurance plan is fiscal
management improvements. One of the fiscal improvements that has been noted for Seamus
is the accountability the MCO gives to its employees. By providing a managed care
organization to the company, this offers the staff more flexibility and authority over one’s
health and financial circumstances. The accountability can be accomplished by allowing
members access to the network of services as well as the option to seek care outside those
physicians and services if need be. The last, but not least fiscal management improvement
that should be addressed is how lower deductibles and fixed premiums provides Seamus with
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