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Analysis of HMO Contract

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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.

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Solution Summary

The solution explains the calculations for a Dental Practice of a HMO contract

Solution Preview

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 ...

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