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Essay on HMO Contract Analysis
A contract has been offered to the owner of a group practice of three dentists and two hygienists by representatives from US Dental care, a large managed care company. The proposal includes participation in a managed dental care plan in which most people are between 20 to 50 years of age.
US Dental Care gave the group some projected utilization figures of quarterly captivated payments covering three age groups. According to the figures given, in the 20 to 30 age group there are 1112 patients with utilization of the patients being 46%. The payment per patient would be $60.08. The total quarterly payment for this age group would be $66808.96. The second age group of 30 to 40 years has 1666 patients and 53% utilization with payment per patient being $78.93. It would have a total quarterly payment of $131497.38. The third age group of 40 to 50 years has 1177 patients and 37% utilization with payment per patient being 94.16. It would have a total quarterly payment of $110826.32. The total payment received by the Dental Practice from US Dental care proposal would be $309132.66.
The Dental Practice has four existing procedures which include Perio, Operative, Prosth and Endo. Their average cost for each procedure is; Perio $85.57, Operative $110.69, Prosth $104.12 and Endo $116.95. The average charges for each Procedure is Perio $152.29, Operative $270.92, Prosth $232.99 and Endo $121.85. The number of patients per age group are; 20 to 30 years 2110, 31 to 40 years 4631 and 41 to 50 years 6923.
By comparing the data given by both groups it seems that overall the Dental Practice has higher profit figures than the payment proposal given by the US Dental Care. But that still varies from procedure to procedure and age group. It seems that the 40 to 50 years age group projects a higher figure in the US dental care proposal....
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