Managing Managed Care: A Comprehensive Costing and Contract Evaluation Model for an Era of Change

Abstract

As the health care industry becomes more and more competitive, management has become aware of the need for increased information to help direct its operations from a present and future perspective. While hospitals recognized the need for this data with the inception of the Medicare Prospective Payment System, other delivery systems such as home health care agencies, long-term care facilities, and hospices (systems that had historically been sheltered from the economic pressures placed upon hospitals) are now realizing that information is necessary for survival. The demands of health care consumers (most notably patients and insurers) requiring quality care coupled with cost- efficiency are making home health care agencies more cognizant of data such as product costing, clinical profiling, and the economic effect of a proposed managed- care contract. A comprehensive costing and clinical information model can help agencies prepare for and respond to the challenges that are now upon them in this ever-changing industry.