I want to confirm that my analysis is correct. I have attached the problem and my analysis as two separate attachments. Thank you.
The notes that were cut off are as follows:
The Dental Practice will be paid on the basis of covered lives.
Capitation is the amount of money paid by the HMO to the Dental Practice per covered life.
Utilization is the percentage of covered patients that will go to the Dental Practice for treatment. For instance, if the utilization is 40% and the covered lives are 10, then the Dental Practice can expect to treat 4 patients even though it will receive the money for the 10 patients.
The data given for the Dental Practice reflects the distribution of patients. For instance, if 4 people walked in from the 20-30 age group, we can expect one patient to come for an operative procedure, one for prosth, two for perio, and nobody for endo.
The HMO patients should be delineated from self-pay patients.© BrainMass Inc. brainmass.com October 16, 2018, 4:48 pm ad1c9bdddf
Your analysis is correct, except you have used the total no. of patients as 1490 when it should be 1830. The loss that you have calculated need not go through the cost route. The cost ...
The solution explains the calculations for a Dental Practice of a HMO contract
Capitation payment models for Doctor Profitability: Should Dr Jones enter into a partial risk capitation agreement with a loca HMO?
A Doctor's Profitabilityâ?"Part II
Read about the various types of capitation payment models and their effect on a physician's clinical behavior in :
After reading the paper, make recommendations for the following scenario.
Dr. Jones has participated in the service capitation agreement for a year. Now the local HMO representative approaches him and explains that he can generate more profit if he enters into a partial risk contract for his assigned members' healthcare services due to the higher PMPM rate ($25 pmpm versus $7.80 pmpm). The proposed contract outlines that Dr. Jones is responsible for providing primary care services in his office but must pay for any specialty care or tests that he orders for his assigned members out of his PMPM capitation rate.
Dr. Jones asks for your recommendation as to whether he should enter into the partial risk capitation agreement.
Are the assumptions reasonable; are they realistic?
Irrespective of whether the assumptions are reasonable, do the conclusions logically follow from the assumptions?
What do you think are the likely consequences of following the recommendations?