This simulation looks at providing health care insurance coverage from the standpoint of a health maintenance organization (HMO).
As HMO executives, your obligation is to provide health care for the members you insure. You must do this with a high degree of quality at a price that covers services rendered. To do this, you must offer only those services you may provide at the cost the customer can pay.
In this simulation, you are presented with two potential customers: Constructit and E-editors. Each company is willing to pay a different premium for insurance coverage, and each company has a unique employee profile for health care risks. Your job is to determine what health care plan would best provide services and cover costs. Remember, at the end of the simulation, you may decide to deny coverage to either or both companies.
Answer the following questions about the insurance coverage and the health care profile. Then, determine what coverage is best for each company.
Health Plans Offered
Castor Standard
Castor Enhanced
List the major difference of each plan.
Does not cover preexisting conditions
Lower prices for all Inpatient/ hospital medical services
Lower prices for outpatient services
Covers preexisting conditions
Increased prices for inpatient/hospital services
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Increase prices for outpatient services
A third plan called Castor Enhanced Minor is also available. What is the major feature that makes this plan different from the two listed above? Customized Plan (Castor Enhanced Minor) – the options of vision screening,
hearing screening, and custodial care are selected optional.
Complete the following chart about the two customers seeking health care coverage.
Constructit
E-editor
Premium willing to pay
$4,000
$4,500
Three major demographic features of employees
Obesity
Obesity
High Cholesterol
High Cholesterol
High Blood Pressure
High Blood Pressure
% of population with major health risks
62%
78 %
Review the demographics and the risk factors of the employees at each facility. The following chart shows services covered by Castor Insurance. Based on the demographics and risk factors would you expect the employees to be high or low utilzers of each service listed?
Service Provided
Constructit
E-editor
Inpatient hospital
High
High
Inpatient surgery
Low
Low
Emergency room
High
High
Inpatient mental health
Low
Low
Maternity care
High
High
Male/female sterilization
Low
Low
Skilled nursing care
High
High
Obesity care
High
High
Physician office visits
High
High
Hearing/vision screening
low
Low
Immunizations
Low
Low
Ambulance services
High
Low
Outpatient mental health
Low
Low
Diabetes care
High
High
Pre and postnatal care
High
High
Prescription drugs
High
High
As Castor Insurance, what plan would you choose for Constructit? Castor Enhanced Minor
As Castor Insurance, list three reasons you have selected this plan.
1. Ability to change required services
2. high risk employees
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3. Need for more medical coverage
As Castor Insurance, if you were going to sell Constructit the customized Castor Enhanced Minor plan, what two services listed above would you eliminate? (Remember, as the insurance company, you want to eliminate what would be the most costly for you.)
1. Obesity Treatment
2. Substance Abuse
As Castor Insurance, what plan would you select for E-editor? Castor Enhanced Minor
As Castor Insurance, list three reasons you have selected this plan.
1. Ability to change services
2. High risk employee services
3. Increased number of high risk employees
As Castor Insurance, if you were going to sell E-editor the customized Castor Enhanced Minor plan, what two services listed above would you eliminate. (Remember, as the insurance company, you want to eliminate what would be the most costly for you.)
1. Substance Abuse
2. Male/Female Sterilization
