41 X v fx 1 ABC D NAME: PROBLEM SET 1 Chapter 2 - Health Insurance Assigned Problem 2 Families First is a managed care plan that has been asked to submit a premium bid to ABC Company a large manufacturer in its service area. The premium bid includes the primary care for all of the ABC employees. ABC has provided information about the age and gender of its employees, and Families First has identified average primary care utilization rates from its own databases. This information is shown below: ABC Company Average primary care Number of Number of visits per year 3 Age band males females Males Females 20-29 285 325 2.10 3.18 530-39 96 100 2.60 3.52 5 40-49 53 57 3.28 3.93 7 50-59 36 36 4.43 B 60+ 7 5 4.98 5.04 Each primary care physician can handle about 3,000 patient visits per year, for which he or she is paid 1 paid S180,000. What primary care rate (PMPM) will Families First propose to ABC Company? 3 ANSWER 4 Visits per year for all ABC employees onun C8 Visit capacity per primary care MD per year 9 Required primary care MDs 10 Compensation per primary care MD $1 Annual cost of primary care MD 32 Number of ABC members 33 Primary care cost per member per year 34 Months per year 35 Primary care cost per member per month