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Early October 2010 Edition
By Douglas B. Sherlock, CFA
In this edition of Plan Management Navigator, we summarize the cost benchmarks of health plans focused on Medicaid.
Administrative Expenses
Core administrative expenses for selected Medicaid focused health plans was 8.4% of premiums in 2009, both overall and in the Medicaid HMO product itself. Comprehensive products had total PMPM costs of $24.90 and the Medicaid HMO product had total PMPM costs of $22.77.
The median values for core administrative expenses for the Medicaid HMO products offered by these health plans were 7.5% of premium and $21.30 PMPM.
Core Costs
Core costs declined by 5.2% PMPM on an as-reported basis compared with a decline of 1.4% last year. Holding product mixes constant, costs declined by 5.8% PMPM compared with a PMPM decline of 1.4% PMPM. Central to the decline was a 13% PMPM decline in Account and Membership Administration costs.
The peer group in this analysis consisted of ten Medicaid plans, which together served 3.9 million members. Of these members, 2.8 million were Medicaid HMO, and this product comprised on average 70.8% of the total.
HealthCare Reform
Health care reform is expected to have a dramatic effect on plans serving Medicaid-eligible members as Medicaid eligibility is expected to increase by 16 million members. But, this takes place in a weak economy which contributes to membership growth while federal and state tax revenues are under pressure. Medicaid health plans are heavily committed to the management of administrative expenses.
Web Conference
We will host a web conference on Tuesday, October 12th from 2:00 PM to 3:00 PM East Coast Time to discuss the summary results. I will offer a brief presentation, followed by questions and answers.
To participate register here: https://www2.gotomeeting.com/register/995011459.
Once registered, dial-in information and a link to connect to the web will be provided in a confirmation email.
Assessment
Link: Navigator Early October 2010
I hope that you find this month’s Navigator of interest and we look forward to your participation on Tuesday.
Sherlock Company
sherlock@sherlockco.com
Ph: 215-628-2289
Fax: 215-542-0690
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Filed under: Alerts Sign-Up, Career Development, Health Economics, Health Insurance, Healthcare Finance, Sponsors | Tagged: CFA, Douglas B. Sherlock, healthcare reform, Medicaid, Medicaid HMO, Plan Management Navigator |
The Leading Business Education Network for Doctors, Financial Advisors and Health Industry Consultants 
Hello All Readers:
As your health plan continues through its budget season, we thought you might find the administrative cost trends of your peers to be of interest.
We are hosting a web conference to discuss the results of the 2010 benchmarking study for Medicaid plans, TODAY, Tuesday, October 12 from 2:00 PM to 3:00 PM East Coast Time to discuss the summary results. Doug Sherlock will offer a brief presentation, followed by questions and answers. To participate in the web conference, please register at:
https://www2.gotomeeting.com/register/995011459.
Once registered, dial-in information and a link to connect to the web will be provided in a confirmation email. There is no charge to participate. The basis for our discussion is the summary published in our newsletter Plan Management Navigator. We have posted it on our web site at the link below.
Click to access Navigator%20Early%20October%202010.pdf
Some additional information is found in a press release issued yesterday, at the following link: http://www.businesswire.com/news/home/20101011006300/en
2009 was a momentous year for Medicaid plans. For participants in our benchmarking study, administrative costs declined PMPM, the second consecutive year Medicaid plans in our universe have achieved this. The weak economy and health care reform make this an environment in which Medicaid plans are being asked to do more with less.
We hope you can join us for this timely web conference.
Best regards,
Sherlock Company
Douglas B. Sherlock, CFA
Senior Health Care Analyst
sherlock@sherlockco.com
Ph: 215-628-2289
Fax: 215-542-0690
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Organized Medicine Stands Up Against Medicare Pay Cuts
Preventing a 23% Medicare physician payment cut is one of several major tasks Congress faces when members return Nov. 15. The American Medical Association and dozens of other medical societies are reminding lawmakers that stopping the reduction before it takes effect on Dec. 1 is crucial to keeping Medicare sustainable.
The AMA, 65 national medical societies, and 24 state societies sent a letter to Congress on Sept. 29 asking members to stabilize Medicare physician pay, at least through 2011. Congress adopted short-term delays of the cuts several times in 2010, including once after contractors for the Centers for Medicare & Medicaid Services began to process Medicare claims with the cuts.
Doug; many thanks for this post.
Source: Doug Trapp, AMNews [10/11/10]
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