If an enrollee uses more services than originally assumed per the PPPM calculation, then the plan would ?
If an enrollee uses more services than originally assumed per the PPPM (Per Member per Month) calculation, then the plan would likely experience higher costs or financial losses.
To understand why, let's break it down:
1. PPPM Calculation: Per Member per Month (PPPM) is a common method used by health plans to estimate the average cost of healthcare services for each plan member in a given month. It takes into account various factors like the number of enrollees and the anticipated utilization of healthcare services.
2. Original Assumption: When calculating the PPPM, the health plan makes certain assumptions about the level of healthcare services that its members will utilize based on historical data, industry benchmarks, or other factors. These assumptions include factors like the number of doctor visits, hospitalizations, and other medical services.
3. Increased Utilization: If an enrollee ends up using more healthcare services in reality than what was assumed in the PPPM calculation, it means that their actual utilization is higher than expected. This could be due to a worsening health condition, unexpected medical needs, or other factors.
4. Financial Impact: The increased utilization of services leads to higher costs for the health plan. The plan now needs to pay for additional doctor visits, tests, medication, hospital stays, or other procedures that were not initially factored into the PPPM calculation. If these costs exceed the premiums collected from the enrollees, the health plan will likely face financial losses.
In summary, if an enrollee uses more services than originally assumed per the PPPM calculation, the health plan will likely experience increased costs and possibly encounter financial challenges.