Assignment:
Given the scenario, your role, and the informationprovided by the key players involved, it is time for you to make a decision. Ifyou are finished reviewing this scenario, close this window and return to thisweek’s You Decide tab, in Canvas, to complete the activity for this scenario.You can return and review this scenario again at any time.
Activity:
So what will you do? Whose advice makes the most sense to you inthis situation, and how will you proceed?
Presentyour comments in a one- to two-page paper, explaining how you will proceed. (Grading Rubic Attached)
Scenario:
The local healthcare market’s dynamics are changing and evolvingdue to the increased competition between healthcare providers and systems.Things are looking up for Community Memorial as it tries to transition to avalue-based care delivery system! But one day, just before lunch, you get acall from Bill Jacobs, the human resource director at Commercial Intertech(CI), the largest employer in the community. Bill says, “I wanted you tohear it from me first. We signed a contract yesterday with MegaPlan Health. Itwill be the managed care organization for all 4,500 of our employees and theirfamilies. About 9,000 patients total. I’m sure that you will want to get acontract with MegaPlan as soon as possible. I noticed that your hospital is notin its preferred provider network (PPN), and I am pretty sure that you willwant to be so that our employees can continue using the facility.” By thetime you thank Bill for the heads up, the acid is already churning in yourstomach. In the hospital world, MegaPlan is known for cutthroat tactics,negotiating steep discounts with hospitals, and fighting every claim thehospital makes. Commercial Intertech has every right to contract with anyhealth insurance provider it likes, but now you have a problem. If you cannotget a decent contract with MegaPlan and become part of its PPN, many localpatients may bypass your hospital and go the closest PPN facility. Delivered toyour office this afternoon, by no coincidence, is a contract proposal from MegaPlan.It calls for the hospital to provide a 35% discount from charges to MegaPlanand all of its members. And it includes service preauthorization requirementsthat will make life very difficult for your business office. You know fromexperience that the hospital loses money whenever the discount from chargesexceeds 20%.
Your Role:
You are the hospital CFO, trying to solve the managed care problem.
Key Players:
Dr. John Evans Chief of Staff
Statement: I know you are not going to like this, but probably onethird of my practice comes from Commercial Intertech . . . employees, spouses,kids. I have had multiple generations of patients who all work out there. Youneed to sign a contract with MegaPlan and soon. I looked at a contract for myown office. It is not great, but if I don’t sign I could risk losing many of mylongtime patients. And sorry to say this, but if the hospital does not sign . .. frankly, I might have to take my patients elsewhere.
Katrina Eaton CEO
Statement: Well, we do need to form a relationship with MegaPlan ifCommercial Intertech has selected it. I would suggest preparing your owncontract proposal for MegaPlan to look at. Be reasonable, but make it somethingwe can live with. Remember, we have some power in this situation ourselves. Ifthe Commercial Intertech employees and families cannot use our hospital, theywill be forced to travel a long way for care and may even have to changedoctors. That will not make them happy at all. You can bet that the HR folks atthe factory will get an earful from their employees if we cannot come to termswith MegaPlan. Make your own counterproposal, and don’t panic.
Linda Freed Business Officer Manager
Statement: There is simply no way that we can work with MegaPlan. Iwent through that at another hospital. They make it impossible to get claimsapproved, and when the payment finally comes it is usually wrong. And then wehave to fight for the rest of our money. Don’t sign! In fact, tear the contractup and mail it back to HR at the factory. The employees will revolt at thefactory when we say no, and MegaPlan will be sent packing down the road!
Nancy Stritmatter CNO
Statement: Well, as you know, my husband works at Commercial, andquite a few of the nurses here are in that situation. What happens if we allcannot even use our own hospital for medical care? I am with Dr. Evans; you’dbetter just sign the contract they sent, and do it today so that no rumors getstarted around the hospital about this situation. Our people will panic if theycannot get healthcare here in town! I could even lose some of my best nurses!
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