Balanced Choice Health Care, Inc.
350 Broadway, Suite 210, Boulder, Colorado 80305
303-499-3888 fax 303-494-3837

www.BalancedChoiceHealthCare.org

Additional Information about Balanced Choice Concepts

Balanced Funding Mechanism
The Balanced Funding Mechanism addresses several issues:

* Assures responsiveness to market forces
* Protects both consumers and providers from a rigid system by allowing providers to set their own fees
* Prevents under-funding of services—the cause of waiting lines and poor quality

The way the Balanced Funding Mechanism works:

The Mechanism is a requirement that the Balanced Choice Governing Board makes periodic reimbursement adjustments to keep the funding in balance even as providers and patients make voluntary choices about which Option to use for health care. As services are rendered, they are tracked. The Funding Mechanism requires that 60% of the services are provided under the Copay Option and 40% are provided under the Independent Option in each specialty area. If, as a result of the choices of consumers and healthcare professionals, the actual delivery of services drifts from the targeted 60/40 split, the Governing Board must make reimbursement adjustments that attract consumers and providers back to the targeted split.

These are the two remedies available to the Balanced Choice Governing Board if the use of the Copay option falls below the targeted 60%:

a) Increase reimbursement rates in the Copay Option so that more health care professionals find that Option desirable.

b) Decrease the amount that Independent Option providers are reimbursed. For example, the reimbursement that Independent Option providers receive might be lowered from 90% to 85% of the Copay Option reimbursements. Such an adjustment would increase the gap that patients needed to pay. The higher gap amount would cause patients to be more reluctant to use the Independent Option, and health care professionals would be motivated to accept more Copay Option patients to keep their practices full.

If the balance should shift away from the Independent Option so that less than 40% of services in a given area were provided under the Independent Option, the above remedies could be done in reverse.

The important idea here is that the Copay Option is always funded well enough that quality and accessibility are ensured.