Fund Balance Theory

Assuming economies of scale, if you fund $1 and your claims are $1.23, then change to another managed care plan and fund the same $1 and claims end up at $0.89, is this conclusive evidence that the later managed care plan has better pricing than the former one?

Editor’s Note: The Fund Balance Theory is plausible and effective. Salesmanship is a science.

From A PPO Provider:

I read your “Funding” BCBS piece. Pretty funny the way they try to arrange reality. Smart marketing.

From A TPA:

Nope it just means I denied more claims then usual and sat on some more till after renewal so I could proclaim how well I managed the claims. Next year when it all catches up was an abortion, just look how good I did last year.

From an insurance consultant:

I have not heard of it. However, in looking at your blog, it doesn’t make any sense to me. How can you compare claims year to year like that? Maybe one year claims are up, the next they are down, with nothing to do with the managed care arrangement.  I prefer to have actual discount data, which Blue Cross does not provide.