Tammy Barclay-HA520-Unit 2_Assignment.docx - 1 Running...

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1Running Head: TULSA MEMORIAL HOSPITAL PLAN PROPOSALTulsa Memorial Hospital Plan ProposalTammy L. Barclay, LaToya Alston, Kacy Desmonds, & Dawn TuleyPurdue University Global
2Running Head: TULSA MEMORIAL HOSPITAL PLAN PROPOSALIntroductionTulsa Memorial Hospital (TMH) started as a community hospital. It was a small facility that provided a variety of services to the Tulsa, Oklahoma area. Recently, the hospital merged with other physician organizations to form a physician-hospital organization (PHO), being renamed as Tulsa Memorial Healthcare. This means that the physicians share ownership of a hospital. Relationships such as this are necessary for forming partnerships that will allow organizations to offer comprehensive managed care (Healthlinks, n.d.). As a PHO, the physicians and hospital have the negotiating power with third-party payers, or managed care organizations (MCO). They participate in determining the terms of contracts as well as working out reimbursements (Managed, n.d.). Once an agreement is met between the PHO and MCO, then all parties are bound to say contract. TMH has been offered a contract with an HMO which will pay a fixed premium of $200 per member per month (PMPM).This seems like a reasonable reimbursement if your patient population is generally healthy or compliant. On the other hand, one must determine if this rate is profitable if there are a large number of chronically ill patients within the area that TMH serves. If this plan is accepted, physicians will be capitated (Fine, 1998). This means there is a fixed monthly payment made to a health care provider every month for each patient the MCO covers, regardless of the number ofvisits the patients make (Managed, n.d.). Currently, the PHO is making a minimal profit due to a large amount of medical staff, wide variations in the cost of care, lack of continuity of care, current reimbursement rates, incentives, and risk pools.SoonerCare, the HMO seeking a contract with TMH, proposes that TMH assume full risk capitation and responsibility for their reimbursement methodologies. It
3Running Head: TULSA MEMORIAL HOSPITAL PLAN PROPOSALwill be determined whether to accept the plan’s proposal according to the recommendations of the consulting firm.As the consulting firm suggested, the “status quo” allocation will stay in line with the industry. The hospital received approximately seventy-five percent of charges in the last fiscal year and they achieved an operating margin of three percent. Although three percent does not seem like high value, it is a positive result. The reimbursement model suggested, in this case, is full risk utilization capitation. PubMed (n.d) states, Full-risk capitation arrangements involve shared financial risk among all participants and place providers at risk not only for their financial performance but also for the performance of other providers in the network. Providers that wish to assume full risk must understand the types of risks they need to manage to ensure financial success for all network

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Term
Spring
Professor
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Tags
Primary care physician, Tulsa Memorial Hospital Plan Proposal

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