Cost Loading And Risk Loading

The second problem: insurers are beginning to hold healthcare facilities financially responsible for never events (Ozan-Rafferty). As a result, physicians and hospitals have to pay for the care they provided, in addition to the errors that they encountered. If the insurers do this, it would bring the downfall of the entire hospital because there would be so much expenses that the healthcare facilities have to pay that it may not be able to pay for most of the debts that they have in the facilities.

Third party – Reimbursement payments made by an insurance company that provides benefits for the

1) Whether the risks that Adair faced were inherent in the activity of rock climbing?

The insurance industry’s performance is highly correlated with the state of the economy and specifically GDP growth. From the data outlined in this report, it is evident that the insurance industry flourishes alongside the economy where factors such as output, unemployment, and other variables are growing as well. Since the 2008 crisis, the Canadian economy has recovered quite well. One of the key concerns going forward is the current exchange rate of the Canadian dollar. Going forward, as the economy goes into a boom it will be crucial for the insurance industry to reach its potential.

Apple Valley Family Practice is a medical practice with four locations in the Minneapolis/St. Paul area. The clinical staff consists of 20 physicians, all of whom practice in one or more areas of family medicine, and 46 physician extenders and nurses.

Health care expenses are a never ending headache that create numerous liabilities. Liabilities are created when goods or services are purchased on credit and obtained through short- term and long- term loans. Health care expenses create liabilities such that payments are made late or no payments are made at all. In some cases, the cost of health care expenses are unaffordable resulting in those type of payments. To prevent large health care debt, many individuals seek health insurance. Health insurance is provided by private insurance companies or by the government. It covers health care expenses and provides the necessary health care. Although, health insurance is necessary it can also be very costly.

Within the formulary the drugs are divided into tiers. Co-payments are based on the tier that the drug is in and range from tier 1, the least expensive drugs, to tier 3 the most expensive drugs. Each insurance company plan is allowed to add or drop drugs from their formularies and move drugs from one tier level to another throughout the year. An insurance company can also drop a drug in the middle of the year, but must continue covering the drug for anyone taking it until the next reenrollment period, at which time a new plan will have to be chosen that covers that drug (Gustaitis, 2007). Although not used a lot there is a fourth tier that is for specialty drugs only. Some plans use a flat-rate or assign a percentage co-pay to the higher tier drugs (Gustaitis, 2007). Other characteristics of the insurance company plans that they have control over are requiring prior authorization for a drug, using step therapy, limiting the quantity, participating at certain pharmacies, and having preferred pharmacies (Gustaitis, 2007).

There is also something known as the coverage gap. For some plans, a patient can reach a

|  Re-imbursement for the insurance. If the paper work is not right it will affect billing and can create major problems.

a. Pay a portion of an individual’s medical expenses according to the terms in the policy

|Indemnity Plan |Able to choose hospital and doctor, Fee for service, deductible, |Individuals and Families |

high proportion of people without coverage, the inefficient and inequitable incentives for the purchase and provision of insurance, the problems in deciding what should be covered, the ineffective payment incentives, administrative costs and complexities, the variable quality

The issue of risk scenario carries immense importance for most of the hospitals that are part of the healthcare setting. However, there is not only one scenario that can affect the hospitals but

Cost of 401’s – we have 3,000 in inventory so 3,000 x 0.4 = 1,200

The inherently antagonistic relationship between insurance companies and consumers is the “core problem” with insurance, but there is more. Imagine a retail organization that could somehow force every single person within the selling area to buy their product. With insurance, on the other hand, certain kinds of insurance are mandatory. It is against the law to own and operate a car without insurance. If the mortgage is greater than a certain percentage of the value of the house, so is Private Mortgage Insurance. Aside from the fundamental unfairness of mandatory insurance, when purchase becomes mandatory rather than voluntary, costs are likely to become inflated. Furthermore, when something is covered by mandated insurance, the costs of repair and replacement become inflated. People charge more because it is covered by insurance. How many people who have suffered fender bender auto accidents haven’t noticed overpriced estimates from body shops when the work is covered by insurance? In other words, most purchase decisions are based upon perceived value – the trade-off between the quality of the most desirable benefits and the price paid for those