Medical Practice: Insurance Distribution

Looking through some numbers from last year, I found an insurance distribution graph in my archives. Essentially, this graph lets me glance at our top payers, and what they represent to us in terms of patients count, charges, revenue and cents on the dollar. See the graph below for details.

Here is how we interpret the graph:  If we take the Blues Bros (as an infamous speaker likes to call them) for example, we see they represented 40% of our entire patient panel. In others words, 40% of patients that we saw in 2010 had BCBS. In terms of [gross] charges, the Blues represented 45%. When we look at revenue they accounted for 50% of our entire income averaging 73cents on the dollar.

Out of our top 10 payers, UHC jumps out at me. Here is why. Only 8% of all the patient saw in 2010 were UHC patients. They represent 9% of our revenue and they average 60 cents on the dollar. If you see closely, they average only 9 cents on the dollar more than Medicaid (IDPA).

If we were to try and negotiate a better contract rates with UHC and fail, I wouldn’t have a hard time deciding to walk away from the UHC negotiation table. Although I wouldn’t want to see nearly 10% of our patient panel leave the practice, taking with them 9% of our income as a result of walking away, the truth is we could easily make up that shortfall by being more proactive in managing our patients’ health. For example, we could easily recall those patients that haven’t had a well check in at least a year. We could also bring back patients that don’t have their asthma well controlled or we could simply spend a little more time with those patients that remained.

Admittedly this graph does not give you a comprehensive picture of one’s practice. But it does give us an idea where we should start our analysis.

Would you like to make any other observations about this graph? Do you do something like this in your practice? Do you find this valuable?

Editorial Note: before someone sends me an email telling me that the chart doesn’t add up to 100%, let me say that I only took our top 10 payers. There are several other plans we take, but because the size of the panel is so small, I chose not to include them.

3 thoughts on “Medical Practice: Insurance Distribution”

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  2. A

    You’ve got a classic example of a good time to take a hard-line negotiation with a payer. You’ve got only upside, no downside.

    Go for it.

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