Premium Development

Student Version

This case illustrates the development of a premium rate by a managed care plan for submission of a bid to furnish healthcare services to employees of a buyer consortium.

The historical cost input data for facilities services is the per diem reimbursement rate for inpatient acute care, the daily cost for skilled nursing facility care, the daily cost for inpatient mental health care, the per case cost for hospital$-$based surgery, and the per visit cost for emergency room services.

The historical utilization input data for facilities services is days per member for acute care, nursing home care, and inpatient mental health care; cases per member for inpatient surgery; and visits per member for emergency room care.

The model consists of a complete base case analysis$--$no changes need to be made to the existing MODEL$-$GENERATED DATA section. However, values in the INPUT DATA section of the student spreadsheet have been replaced by zeros. Students must select appropriate input values and enter them into the cells with values colored red. After this is done, any error cells will be corrected and the base case solution will appear. The KEY OUTPUT section includes the most important output from the MODEL$-$GENERATED DATA section.