Health Plan Operations

Running head: ANSWERS TO LECTURES 5, 7, & 8

Answers to Lectures 5, 7, & 8: Articles on Health Plan Operations, Public Sector Managed Care, and Trends and Current Issues
March 30, 2008

Answer to Lecture 5 – Health Plan Operations
In the article released by Healthcare Price, Cost and Utilization Benchmarks entitled ‘Study Reveals Best Practice In Plan Administrations’, it was stated how Sherlock Company conducted a very innovative study on more than 1,700 statistical data of finance and operations (Study reveals best practice in plan administration, 2006, p.214).   From the given article, if I were to pick only three operating metrics, which I would use in monitoring a health care plan, I would choose the following metrics:
    • Membership growth rate – This is very important, since it reveals the highest rate of membership growth, which is directly connected to the total marketing and commission costs.   Going over the advertising & promotion, the average group size, the total marketing, and the commissions would make way for lower advertising costs, which would deliver greater privileges of producing higher profits and income.
    • Total Costs of Market – This is also very important, since it reveals the overall cost of marketing, from advertising costs to product development and marketing research.   It would reveal the customer satisfaction rate, and would be linked to membership growth rate and group growth rate.   Higher costs mean growth for the product.
    • Local Market Share – This cannot be abandoned as well, especially that it shows the rates of marketing and members, wherein greater rates mean fewer opportunities for brokers.   Market share would reveal the approximate number of employees, as revealed in the study (Study reveals best practice, 2006, p.214).   This influences the total cost of marketing, which would directly influence savings and profit.
      The membership growth rate, the total costs of...