Question

What functions do health plans perform to justify their position in the healthcare marketplace?

Answer 1

The functions that health plans perform to justify their position in the healthcare marketplace are – underwriting, marketing, utilization review, and claims administration.

• Underwriting – First and foremost health plans accept risk just like an insurance company accepts risks. Health plans provide payments for services which are not certain at the time of contract. Thus underwriting of risk is an important business function and it is because of this that health plans are able to justify their position in the healthcare marketplace.
• Marketing – The second function that health plans perform to justify their position in the healthcare marketplace is communicating the availability of their product. For this purpose they use different media.
• Utilization review – This function of health plans enables them to control costs. Health plans use different types of utilization review techniques. For instance they make use of doctors as well as nurses to determine the appropriateness of the delivery of non-emergent medical care.
• Claims administration – A necessary as well as an important administrative process is involved with regards to payments being done to health care providers for providing services to subscribers. Health plans perform the task of verifying coverage for the services. They also determine the amount of payment for the services.