Assignment: Labeling Healthcare Transaction

Draw a diagram explaining and labeling Healthcare Transaction B.

Healthcare Transaction B:

Peter works with Corporation X and is covered under Corporation X’s health plan (assume Peter pays no monthly premiums). Corporation X self-insures and pays TPA Services, a third-party administrator to handle Corporation X’s health plan. Peter goes to the doctor once to get service. The total cost for the physician’s service was $60,000. The insurance terms are:

a. $50 co-pay per visit.

b. $450 deductible (assume co-payment counts toward deductible).

c. After the deductible, the costs are split 80/20:

i. 80% insurance company; and

ii. 20% patient.

d. A “stop-loss” provision of $8,000

Do the following:

(1) Explain what parties bear economic risks in Healthcare Transaction B.

(2) Label each party, the directionality of the money, and the exact amount associated with each term (e.g., co-pay) above (see the examples below). You do not have to draw the diagram using software (e.g., Word, Power Point); you can do it using pen and paper (as long as it is legible). If you use pen and paper, please take a picture and upload it to Blackboard.

Diagram Example:

Example of a diagram where the patient is uninsured and pays 100% out-of-pocket for a medical visit where the total cost of services is $100.

–>$100

PETER DOCTOR

<– Service

 

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