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Health Care Planning Decisions

Health Care Planning Decisions. A Simulation Approach Patrick Riechel. Nationwide Healthcare Cost I mpact. Agenda. Tradeoffs Model Characterization Decisions to be made Decision criteria Findings. Find Best Decision Given Tradeoffs. VS. Model Characterization. Healthcare costs data

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Health Care Planning Decisions

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  1. Health Care Planning Decisions A Simulation Approach Patrick Riechel

  2. Nationwide Healthcare Cost Impact

  3. Agenda • Tradeoffs • Model Characterization • Decisions to be made • Decision criteria • Findings

  4. Find Best Decision Given Tradeoffs VS

  5. Model Characterization • Healthcare costs data • Agency for Healthcare Research and Quality • Kaiser Family Foundation • Town records • Salary data • Massachusetts Department of Elementary and Secondary Education – Average Teacher Salaries • Employee Loss Function: inverse normal probability distribution function

  6. Employee Loss Function Region’s total compensation distribution 1-P(x ≤ X) x = Town total compensation

  7. Decisions • High-cost plan, low-cost plan, both, … • Both with option to drop high-cost! • Drop when adoption of low-cost at a threshold percentage

  8. Decision criteria • 6-year NPV of (total compensation + cost of rehiring) • Mean • 5% • 95% • Total employees lost

  9. Findings • Sensitive to indefinite assumptions! • Cost to rehire • Employee loss function • Could get best decision to vary along entire spectrum • Only use low-cost option • Offer both plans from now until eternity • Offer both plans from now until 0-100% of employees have switched to low-cost plan • But… • Option never got in the way and sometimes was useful!

  10. What was the point?

  11. Questions?

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