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Managed Care Plan Enrollment Case Study

The employees who work in Atlanta, Georgia drive in from 14 counties. It is made up of various types and sizes of companies, employing all ages and ethnic groups.

The ABC Insurance Company was very aggressive and quite successful in recruiting companies, organizations, and individuals to join its Managed Care Plans. They spread out among the 14 counties on a very aggressive sale campaign selling a very good managed care package to employers and organizations. Their success was part of their problem.

Some employers and employees of the contacting companies wanted to include the XYZ Hospital because of its excellent reputation in quality maternity care and cardiac rehabilitation.

When the ABC insurance company approached The XYZ Hospital to recruit them for participation as a provider of their Managed Care Plan, the XYZ Hospital became very demanding.

The XYZ Hospital demanded that in order for them to sign on as healthcare provider, all maternity care and cardiac patients in the plan must be seen at the XYZ facility or it would not sign the contract.

Many employers pressured the ABC Insurance Company so they agreed to XYZ Hospital stipulations and enrolled the XYZ Hospital in the plan. This was a legal binding contract for both parties.

This created several problems.

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This would mean that a patient might need to drive 50 miles and pass 4 or 5 good hospitals in the plan in order to get the care they needed.
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The patient's attending OB physician(s) or Cardiac physician(s) did not have privileges at the XYZ Hospital. These physicians threatened to dis-enroll from the plan.
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To give them privileges would mean more staff meetings and Emergency Room duty at a far away hospital. These physicians threatened to dis-enroll from the plan.
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The existing staff physicians at the XYZ Hospital objected to the loss of available hospital space and time, as well as, the possibility of the loss of existing patients to the new physicians. These physicians threatened to dis-enroll from the plan.
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The other hospitals in the managed care plan objected to the loss of patients and threatened to dis-enroll from the plan, and to sue for restraint of trade.

QUESTIONS:

* What should the ABC Insurance Company do? Why? How?
* What should XZY Hospital do? Why?
* What should the employers do? Why? How?

What should the patients do? Why? How?

Solution Preview

This case study is very interesting due to the multi-dimension effect of the problem source. In questions like this it is important to understand that there could be many solutions all dependent upon the response of the parties involved...this is a domino effect problem. If A does this, how will it affect B and how will they react and how will their reaction affect C and D and so on. It is also important to remove the distracters in problems like this. It can become overwhelming to try to provide a solution that will make everyone happy. In the case presented, there is a high likelihood that one or more of the players will not be satisfied with the final decision. What the ABC Insurance company must do is analyze the possible solutions based upon a cost/benefit model and then respond with whatever solution serves the greatest good. More on that below...

I. What should the ABC Insurance Company do? Why? How?
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II. What should XZY Hospital do? Why?

First, before we discuss what ABC should do, let's talk about what they should have done form the beginning. Prior to finalizing a contract with XYZ Hospital that had the potential of alienating both physicians and specific patients; they should have gone back to the negotiating table with the companies that were demanding their inclusion and express the demands that were being made by the hospital. A clear explanation of what this would mean to their employees may have changed the company's views on inclusion. Additionally, the insurance company had an ...

Solution Summary

A Managed Care Plan Enrollment Case Study is exemplified.

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