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7. Employer A is self-funded and offers its employees and their dependents an Anthem PPO plan in 2022. As budgeting for 2023 begins, Employer A

7. Employer A is self-funded and offers its employees and their dependents an Anthem PPO plan in 2022. As budgeting for 2023 begins, Employer A realizes that it cannot afford to spend as much on employee healthcare expenses in 2023 as it did in 2022. Employer As CFO contacts St. Elizabeths Managed Care team asking, If we were to get rid of Anthem PPO and sign a direct contract with you, would you give us a 20% deeper discount on rates? St. Elizabeths Managed Care team responds saying, Yes, but the caveat is that you employees and their dependents may only use St. Elizabeth facilities for its services. Describe why the idea of discounted rates in exchange for steerage is a viable option with little to no risk or harm to St. Elizabeths margin from this small Employer A population?

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