IT Planning & Budgeting In Healthcare July 10,

Transcript:IT Planning & Budgeting In Healthcare July 10,:
IT Planning & Budgeting In Healthcare July 10, 2013 1 Discussion Introduction Healthcare 101 Business of Nickels Healthcare Budgeting Challenges The Problem Thinking Different 2 John Jarvis BA Psychology; Research Design & Statistical Analysis 20 Years Healthcare Experience 15 Years IT Experience Healthcare Business Analytics, Process Development, Programming (SQL), Capacity and Cost Efficiency, IT Portfolio Management, IT Finance Management 11 Years with Molina Healthcare 3 Healthcare Financial Concepts Government Programs Medical Cost Ratio (MCR) Per Member Per Month (PMPM) 4 Government Programs Medicaid – is the program for families and individuals with low income and is jointly funded by the state and federal governments. Medicaid is managed by the states. 2013 poverty guideline for a family of four is $23,550. Medicare – guarantees access to health insurance for Americans ages 65 and older and younger people with disabilities as well as people with end stage renal disease. Children’s Health Insurance Program (CHIP) – is administered by the U.S. Department of Health and Human Services. It provides matching funds to states for health insurance to support families with children and with incomes that are modest but too high to qualify for Medicaid. Medical Cost Ratio (MCR)* - Defined *Medical Loss Ratio (MLR) is alternative term MCR = Medical Costs / Premiums 85% or lower (Industry Standard) Drivers: Population Type (e.g., ABD), preventive care, access to care, quality of care, etc. 6 Per Member Per Month (PMPM) - Defined Monthly Cost / # Members (Monthly) Premium is received monthly for each member MCR can be determined on a PMPM basis PMPM used to compare costs across a similar population More Members + Good MCR = Increased Profit 7 8 How Does Molina Work? Revenue Direct Medical Costs Medical Margin Administration Premium Taxes Pre-Tax Profit Taxes Profit $166. 00 $135.00 $31.00 $19.00 $12.00 $5.00 CLAIMS For the average Molina Member each month, per member per month (pmpm) CLAIMS CLAIMS Not actual results – for illustrative purposes only $7.00 Healthcare Budgeting & Planning Predicting the Unknown -- Accurately Regulations change constantly, immediately, and have an unknown long term cost impact Fixed Revenue PMPM decreasing Membership Increasing Medical Costs Rising (Technology impacts) 9 Healthcare Budgeting & Planning Typical planning patterns in Healthcare Estimate Membership Growth Set MCR and PMPM goals Predict future regulation impact Understand financial impact of future acquisitions and mergers Estimate and understand business demand Look at Revenue Provide targets based on percentage