Managed Health Care in the New Millennium: Innovative Financial Modeling for the 21st Century, 1st Edition (Hardback) book cover

Managed Health Care in the New Millennium

Innovative Financial Modeling for the 21st Century, 1st Edition

By David I. Samuels

Productivity Press

306 pages | 3 B/W Illus.

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Hardback: 9781439840306
pub: 2011-12-05
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David Samuels, a leading authority on financial models in healthcare, draws on his multidisciplinary background in all aspects of managed care to provide an expansive yet detailed perspective of this complex field. Grounded in evidence-based modeling, the book’s multidisciplinary focus puts the spotlight on core concepts from the standpoints of health plans, hospitals, physician practice, and their respective integrated network models.

You’ll learn what happened when a country’s national health care plan is developed with problematic underwriting, why hospitals will always be victimized at their payer’s bargaining table, and even how to improve the current primary care shortage at both 50% less provider costs as well as with triple their members’ compliance in wellness care. The book gives you the critical tools to stay ahead of the learning curve, engage patients to take responsibility for their own and their family’s health status, and improve your differentiation in a RAPIDLY changing marketplace.


Managed Health Care in the New Millennium is elegant in both the simplicity of its premise, as well as the detail in which David Samuels lays out a prescription for navigating the uncharted, murky waters of Health Care’s future. His rational, plausible take on the complex problems, and possible solutions, while not offered as a panacea for an industry in turmoil, is fresh and bold. For once, consumers are not ignored as hapless victims, or un-savvy consumers. Instead, they are given practical tools and a voice, which may just be the future path to simultaneously cut costs and improve the quality of the care they so well deserve. Well done David!

—Andre B. Van Niekerk, PhD, Dean, School of Business, Woodbury University, President, (LBR) Luxury Branding Research, Los Angeles

Managed Care in the New Millennium is more than a very readable future history of managed healthcare. It’s a call to action for those who must make decisions on how healthcare services should be delivered and how the financing on managed care should be carefully structured towards common medical and financial goals. Managed Care in the New Millennium should be required reading for everyone needing to understand how managed healthcare worked in the past, is now "working" in the present and how managed care will evolve in the future. Mr. Samuels presents valuable information for medical and hospital administrators, healthcare insurance companies, legislators, human resource managers, consultants, and individual patients that is long overdue.

—Lawrence R. Lievense, FHFMA, FACMPE, Healthcare FINANCIAL Experts, Inc.,

David Samuels’ book comes to the market just in time for health plans, physicians and hospitals to consider new options in a post reform environment. An expert in reimbursement and the mathematical fundamentals of prospective payment for over three decades, David has updated his original book, Capitation, in line with the refocused needs of providers and payers to collaborate over value instead of fighting one another over manipulated fees schedules and volume. In short order we get a 15-year update on where managed care went wrong in its reimbursement and how the use of performance data and more thoughtful application of care management techniques can build accountability into a mutual framework of payment and service for purchasers and providers. The author then goes one step further into offering innovation upon a theme to expand the thinking and capabilities of providers and purchasers to share savings and put in place key performance indicators using predictable formulas. David’s work can help many healthcare executives do a better job of understanding and planning for the future. We recommend his publications to our clients and believe his innovation offers insight into what accountable care means and how the consumer will eventually benefit through a more rational and defined care system.

William J De Marco MA, CMC, President and Chief Executive Officer, De Marco & Associates, Inc.

David Samuels offers great insight into the health care insurance markets and the enormous potential of capitation to contribute to the solutions our Nation so sorely needs. Capitation will inevitably impact the industry's evolution and I know of no more comprehensive and detailed a depiction of its strengths and opportunities than Managed Health Care in the New Millennium.

Carl Heard, MD, MMM, Independent Locums Physician, Consultant for Medical Management

Table of Contents

An Updated Introduction to Managed Care and Capitation


A Simple Definition—But Not So Simple History—of Managed Care and Capitation

Understanding Managed Care in the Private and Public Sectors: A Reality Check

Understanding Capitation—and Not Just Financially

Effects of Public Policies on Capitation and Capitated Relationships

A Simplified Understanding of Managed Care Models

Two Basic Demand Models of Managed Care: Illness-Based Versus Wellness-Based

Understanding Health Plans

Understanding Managed Care Industry Operations

Introduction To The Insurance Industry

Understanding ERISA Implications for HMOs and Employers

Introduction to Managed Care Underwriting

Introduction to Commercially Insured Populations

Understanding Rating Methodologies: Community Versus Experience

Understanding and Predicting Medical Losses

Introduction to Actuarial Mathematics

Premium and Product Issues

Employer Benefit Plan Design

Payer-Provider Risk Relationships

Stop-Loss and PMPM Relationships

Other Interrelationships

Risk Banding and Provider Risk-Sharing Arrangements

Payer-Provider Financial Relationships

Claims Management and Processing

Referral Management

Payer Development of Provider Panels

Outcomes Reporting

Advanced Studies in Capitated Managed Care

Understanding of "Operational" Capitation for the Healthcare Industry


Managed Care Provider and Practitioner Operations


The Board of Directors

Payer Benefit Determination

MCO Economics

Specialty HMOs

Federal Qualification Eligibility by Office for Managed Care

MCO Marketing and Product Development

Revenue Drivers Based on Requests for Proposal and Requests for Information

Payer and Practitioner/Provider Services

Strategies to Manage Provider/Practitioner Costs

Payer/Provider Budgeting and Financial/Resource Estimation


Managed Care Organization Quality Benchmarking


Accreditation of HMOs Under NCQA

URAC Accreditation Procedures

Accreditation of Preferred Provider Organizations

Introduction to Six-Sigma Quality Benchmarking Methodology

Quality Improvement and Benchmarking Approach for Six Sigma

Utilizing Six Sigma Benchmarking in MCO Operations

Learning from Clinicians: Healthcare Finance’s Best Response to Six Sigma


Managing the Managed Care Enrollee


Managed Care Expectations of Enrollees

Managed Care Enrollee Access and Accessibility Modeling

Managed Care Choice

Managed Care Quality at the Enrollee Level

Managed Care Enrollee Impacts on Provider/Practitioner Costs

Health Guidance Services for Managed Care Enrollees

Enrollee Responsibility to Comply With Strategies for Treatment, Disease Adaptation, Health Status Improvement, and Healthiness Management

Appropriateness of Provider Resource Utilization of Enrollees

Methods of Transforming Behavior of Capitated Enrollees

Typical Member Rights and Responsibilities


Enrollee-Based Financial and Mathematical Prediction Models


Overview of Case Management/Utilization Management

Use of Financial Data Derived from CM/UM

Incurred-But-Not-Reported Case Management Data

Managed Care-Specific Financial Indicators

MCO Internal Control


Management of Managed Care Information for Modeling Purposes


Data Elements and Sources

Definition of Database and Claims Payment Information Flows

Distinction Between Logical and Physical Units of Managed Care Data

Data and System Security Issues for MCOs

Differences Among Managed Care Reports

Integration of Managed Care Databases

Electronic Connectivity of Managed Care Information


Managed Care Legal and Regulatory Compliance


Federal Regulatory Compliance in Managed Care

State Issues

Compliance in Electronic Transmission of Member Records and Encounters

Capitation Contractual Issues

Model HMO Act


Innovative Managed Care Modeling for the 21st Century

Part A: Modeling for Accountable Care Organizations Focusing on Medicare

Needs Identification for Process Improvement ("Find Phase")

Establishing Team Approach for Process Improvement ("Organize" Phase)

Establishing Rationales for Process Improvement ("Clarify" Phase)

Root Cause Analyses of Rationales for Process Improvement ("Understand" Phase)

Selection of Implementation Approach to Improve Care Deficits and Cost Savings ("Select" Phase)

Plan and Program Development to Implement Selected Process Improvement ("Plan" Phase of Deming’s Cycle)

Roll-Out of Implementation Plan Selected for Process Improvement ("Do" Phase)

Validation of Process Improvement ("Check" Phase)

Action Steps to Re-initiate the Deming Cycle ("Act" Phase)

Part B: An At-Risk Disease Management Approach for SSI Recipients


Innovative MCO Financial Modeling for the 21st Century


Future Value of Managed Care Contracting: Part 1

Future Value of Managed Care Contracting: Part 2

Conclusion: A Final Walk Down Memory Lane


About the Author

David I. Samuels is the president and CEO of EthiCare Breakthrough Solutions/EthiCare Revenue Cycle Management, Inc., a consulting firm that specializes in sales and marketing activities tied to risk-free/net-recovery relationships and that identifies hospital undercharges by selecting specific charges for which services were rendered but never billed.

Subject Categories

BISAC Subject Codes/Headings:
BUSINESS & ECONOMICS / Management Science
BUSINESS & ECONOMICS / Quality Control