Question

The medical director of a large health insurer, 100,000 enrollees with premium income of $500,000,000 has a preventive care budget of $10,000,000 (2% of total premium income). Given the list of preventive care services (ranked in declining order of cost effectiveness below and located in the Problem 9.1 tab in the BudgetCh09.xls file), their prices, and the number of eligible members who could benefit from each service (assume only 40% of eligible will partake of preventive care offerings), what services should be offered or where should the medical director draw the line?

Effect-			# of
iveness	Program	Price	Patients
1	Daily Aspirin Use, discussion	$20	10,000
2	Smoking cessation, discussion	$30	23,000
3	Colorectal cancer screening	$18	40,000
4	Hypertension screening	$50	40,000
5	Influenza immunization	$5	22,000
6	Problem drinking screening & counseling	$30	8,000
7	Vision screening	$50	100,000
8	Cervical cancer screening	$125	25,000
9	Breast cancer screening	$100	25,000
10	Chlamydia screening	$58	14,000
11	Calcium supplements, discussion	$20	50,000
12	Folic acid supplements	$20	50,000
13	Obesity screening and counseling	$50	33,000
14	Depression screening	$50	24,000
15	Hearing screening	$150	50,000
16	Injury prevention counseling (0-4)	$50	1,600
17	Osteoporosis screening	$225	23,000
18	Cholesterol screening-high risk	$53	60,000
19	Diabetes screening	$63	7,000
Source:	Priorities Among Effective Clinical Preventive Services, Results of a
	Systematic Review and Analysis, Maciosek MV, Coffield AB,
	Edwards, NM, Flottemesch, TJ, Goodman, MJ, and Solberg LI,
	Am J Prev Med, 2006; 31(1), 52-61.

If your solution does not use all available funds, develop alternatives that will. How many preventative services can be delivered to members?

Answer 1

Since the budget is surpassed by $4,649,200, hence the medical direct should draw a line (reduce the number of preventive care offerings).

This analysis is done by calculating the cumulative cost of the preventive care offerings. The insurer shall offer services till the cumulative cost is not exceeding the budget.

Based on this analysis, insurer can offer upto 17 preventive care services without exceeding the budget.