Chapter 7

Price setters vs price takers. When a provider has market dominance, and hence can set its own prices, it is said to be a _____?

Providers are ___? Perfectly competitive markets Payer dominance Government programs

When a provider is a price setter there are two most common theoretical bases

Full cost pricing, prices for a service are set to cover all costs: (3)

Price takers uses

Scenario Analysis, to break even, revenues must

total costs = ___ + ____

the value of scenario analysis, focused on:

Setting Managed Care Plan Rates,

Setting Managed Care Plan Rates (Cont.), There are three techniques used to set the rates for individual providers:

To illustrate the FFS method, assume that BetterCare HMO targets 350 inpatient days for each 1,000 members of an employee group, or 350 ÷ 1,000 = ____ per member

FFS approach cont, inpatient cost = (pm utilization rate x ffs) / 12 = (_____ x 1,000$)/12 = ___ PMPM

Cost approach is commonly used to estimate _____ costs for the ____ population. Assume each enrollee will make 3 visits per year to a PCP (primary care physician). -each PCP can handle 4,000 patients visit per year -pcps are compensated at an annual rate of $175k per year each member will require __ visits divided by __ patients = _____ pcps ~ the annual per member pcp cost is ___ pcps x ____compensation annual rate = ____ $ $ __ divided by 12 = ___ $

What is RVU?

Relative value units measure the _____ amount of resources consumed to provide a _____ service. they form the basis for ___ for physician reimbursement

a variance is the difference between the ___ results and the budgeted ( ___ ) value

variance analysis is a technique applied to budget data to