Bluefield health plan Essay

fore electric car employees were opting for their wellness redress policy project. Arc electric automobile had expanded their workforce due to which more(prenominal) employees were enrolling for Bluefields health insurance plan for the benefits. But when Bluefield released that the utilization of their physician run had hugely subjoind in the last 6 calendar months because of which their profits were being affected, they had to set out out the cause for this.Soon they realized that the main cause for the increase in the utilization of their physician serve was the increase in the make out of new employees who were opting for the health insurance plan. Exhibit 1 clearly shows that the material body of Arc Electric employees using Bluefields Health insurance plan has increased from 3912 in July, 2006 to 4137 in August, 2006. Thus, in only one month the increase has been of 225 people, which is comparatively quite high.Also, in 2006, the total cost incurred by Arc Electric for inpatient and outpatient hospital services were 203425 and 182440 in July and 212250 and 180700 in August, and for running(a) services were 101250 and 103400 in July and August. Thus, the total cost incurred for hospital services and running(a) services were 487115 and 496350 in July and August. While on the other top the total cost incurred by Arc Electric for visits to physicians office was only 337900 and 391450 in July and August.Therefore we can try that the leaving is almost of 147215 and 104900 in July and August. As Bluefields condense with Arc Electric was about to expire the next month, they had to renegotiate the terms in their contract with Arc Electric and request for an increase in their agiotage yard in order to maintain their profit. They had realized that the main reason for their wearing away of profits was the increasing number of Arc Electric employees who had opted for their health insurance plan.But, Bluefield were also aware of the fact that durin g renegotiations if they tried to increase the fixed support which they charged any employee of Arc Electric per month, then they whitethorn correct to do anymore business with them and sign a contract with about other health insurance company. This, Bluefield was non ready to risk. Thus, Bluefield wanted the mental faculty members and directors to devise a renegotiating strategy which they could present before Arc Electric and maintain their contract with them while at the same time see to it that their profitability remains at par.After much consideration and results from mingled studies, including Exhibit 1, the employees of Bluefield realized that scarcely by increasing their copayment charges they will not be able to bring about a decrease in the number of physician visits since people do not actu everyy bid to visit the physicians but rather do it in order to remain healthy and fit. The only way they can reduce their costs is by paying less to their health care provi ders, like the physicians.Thus, they first postulate to negotiate with the physicians and ask them to decrease the costs of services supplied by them. If they simply asked the physicians to lower their cost of service by around 10% or 25% they might do it with the fear that they may loose all of their patients and also be left out of Bluefields health insurance plan. But this may have certain negative effects as in return of a lower fee per visit the physicians may also lessen the quality of care that they give to their clients. This is the reason wherefore Bluefield required a further analysis of physicians visit.Out of the $250 fixed bountifulness that Bluefield charged each employee of Arc Electric every month, the total premium revenue was portioned out as 55% for the hospital and surgical services and 30% for the physician visits. Thus while $137. 5 went for the hospital and surgical services only $75 went in for the physician visits. Thus for every premium collected, the pr ofitability of hospital and surgical services was almost $62. 5 more than the profitability of the physician services. Thus, when compared to physicians services, hospital and surgical services have a profitability of almost 45% more than the former.