Families First is a managed care plan that has been asked to submit a premium bi
ID: 2683483 • Letter: F
Question
Families First is a managed care plan that has been asked to submit a premium bid to ABC Company, a largemanufacturer 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
Age Band males females Males Females
20-29 285 325 2.10 3.18
30-39 96 100 2.60 3.52
40-49 53 57 3.28 3.93
50-59 36 36 4.14 4.43
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
$180,000. What primary care rate (PMPM) will Families First propose to ABC Company?
Explanation / Answer
$178,021. Get the number of visits and then divide by 3000 max. patient load. Then multiply the result by $180,000. If you round down the 0.03 excess visits the total would be $178,080. Take males 20-29 there are 285 and they to 2.1 times/year each, so that is 598.5 visits. For females 20-29 there are 325 and they go 3.18 times/year each so that is 1033.5 For 30 39: Males 96 at 2.6 times/year or 249.6 visits Females 100 at 3.2 times/year or 320 visits For 40-49: Males 53 times 3.28 is 174.8 Females 57 times 3.93 is 224.01 For 50-59 Males 36 times 4.14 equals 149.04 Females 36 times 4.43 equals 159.48 For 60-69 Males 7 times 4.98 equals 34.86 Females 5 times 5.04 equals 25.2 The total of all of the visits is 2968.03, or rounded down, to 2968. Take 2968 (or 2968.03 if you wish) and multiply by the $180,000 to get the $178,021 number.
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