To get you started (but not to limit your response!), what do you know about the revenue stream for each major payer? How is the HCO paid? What operational processes and systems are important for maximizing each particular payment method? Which payment methods are most critical for Big Sky and what does this mean about the priorities and focus for management? What risks does Big Sky need to manage? What are the motivations for the physicians and for the consumers and how do these matter to Big Sky? Thinking about these questions should get you started. As always, your analysis and conclusions will need to be fully described and organized so that your logic and rationale are clear and are clearly linked to the course material.

Big Sky is a multi-specialty physician practice, established as a Limited Liability Partnership. The financial statements from the most recent fiscal year reveal the following payer mix (as a % of total revenue):

Commercial:

Fee-for-service 37%

Managed care 10%

Capitated contracts 5% Total 52%

Government:

Medicare 29%

Medicaid 8%

Total 37%

Miscellaneous:

Self-pay 6%

Other 5%

Total 11%

Total 100%