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Related Experiment Videos

Improve--rather than lose--your risk-taking entity.

F M Prescott1

  • 1First Health Associates, Inc., Ann Arbor, Michigan, USA.

Healthcare Financial Management : Journal of the Healthcare Financial Management Association
|August 18, 2000
PubMed
Summary

Health maintenance organizations (HMOs) shifting financial risk to provider organizations can lead to financial and administrative challenges. Financial managers must monitor key indicators to prevent potential losses.

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Area of Science:

  • Healthcare Management
  • Financial Risk Management
  • Provider Contracting

Background:

  • Health maintenance organizations (HMOs) increasingly transfer financial risk to provider organizations.
  • This transfer often includes administrative functions like claims processing.
  • Provider risk-taking entities include physician-hospital organizations (PHOs) and independent physician associations (IPAs).

Purpose of the Study:

  • To inform financial managers about potential financial risks when HMOs transfer risk to providers.
  • To highlight the importance of monitoring medical costs, pricing, and underwriting.
  • To emphasize the need for awareness of administrative efficiency impacts.

Main Methods:

  • Analysis of financial risk transfer mechanisms in HMO-provider relationships.
  • Identification of key financial indicators and processes.
  • Review of administrative function responsibilities.

Main Results:

  • Provider organizations face financial risks in medical costs, pricing, and underwriting.
  • Administrative efficiency is a critical factor alongside financial risk.
  • Early identification of problems is crucial for loss prevention.

Conclusions:

  • Financial managers in provider organizations need to be vigilant about risks transferred from HMOs.
  • Monitoring financial and administrative performance is essential for proactive management.
  • Implementing robust processes to identify potential losses is recommended.

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