Create a 8 page essay paper that discusses THG Management Services.

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It is apparent from the case study that the region in which THG is planning to run an HMO, has been lagging behind the rest of the nation in terms of availability of healthcare centers, which is resulting in higher costs for the services. With the announcement of the program called TennCare, healthcare in Tennessee became a national issue and it is now being felt that running a Health Maintenance Organization (HMO) is bound to prove a profitable proposition because.

i. Despite an increase in managed care in the state, the commercial premium per member/ per month in the HMO sector has not come down. It is worthwhile here to mention the hospital days for patients have instead come down. This indicates that there’s still a growing demand for HMOs.

ii. THG has been able to take advantage of the first mover advantage in several areas. This advantage reflects in the capitation in the commercial market. Capitation is the term used to identify the payments given to the physicians attached with HMOs. It is a fixed payment made to the physician depending upon the number of people enrolled with the HMO and the number of members put directly under the care of the physician. It is worthwhile here to mention that, the capitation amount is paid to the physician irrespective of the number of visits made by a member to the physician or irrespective of the number of members visiting the physician for their healthcare needs. Using the capitation network model, THG has been able to bring greater efficiency to the southern US healthcare market.

iii. Having fixed its priorities, THG was able to develop a fast growing company with considerable success in short period of time. It was during their expansion plan that THG started evaluating the options of managing versus owning the risk. The two options being assessing the practical aspects of having a commercial group guaranteeing 8000 lives in Texas and managing Medicare projects in Atlanta, Georgia with another AMC.

iv. Both HMO and PPO enter into an agreement with insurance companies, but the HMO offers its services at predetermined rates while in case of PPO the rates can vary depending upon the medical condition of the individual.

v. HMOs often happen to be very restrictive and expect the individual to seek assistance for medical needs from within a network of doctors, medical practitioners, healthcare organizations. On the other hand a PPO doesn’t have any preconditions attached and allows the individual to any place for treatment. Except in cases of emergency, tor an individual enrolled with HMO, it’s a prerequisite that s/he must go through the primary care physician from within the HMO network and if this physician feels necessary then only the individual will be referred to any specialist. This might appear little restrictive in the sense that the individual has to follow couple of procedures before getting specialized treatment. On the other hand in case of PPO, there’s no such restriction and an individual can seek the opinion of a specialist of his or her choice.

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