The International

Business Languagesm
Managed Care
Glossary of Terms
Version 4.0

Preface 1
Process Taxonomy 2
Process Areas Pick List 3
Process Areas Definitions 5
Enablers Pick List 17
Enablers Definitions 18
Topics Pick List 19
Topics Definitions 20
Measures Pick List 21
Measures Definitions 23
Products/Services Pick List 34
Products/Services Definitions 35
Industry Pick List 36
This document is intended for internal use and distribution only.
For additional information, contact the Knowledge Centre in Dallas at
1-800-283-0547, or in London at 44-171-939-4555.

KnowledgeViewsm and The International Business Languagesm are service marks of

Price Waterhouse. All rights reserved.
CI-41012
Copyright 1998. Price Waterhouse LLP. Management Consulting. All rights reserved. 1297

2
Preface

KnowledgeView is a unique tool that helps Price Waterhouse professionals tap into the power and potential of
best practices on behalf of clients. What makes KnowledgeView superior to any other best practices system?
The approach to world-class solutions must be global. Good ideas cross geographic borders as well as the
narrow contents of any one industry. To make translation possible, Price Waterhouse created The International
Business Languagesm (IBL). The IBL lets you view the successful processes of different companies and then
breaks them into their primary and comparable components. The language turns an apples to oranges world into
the kind of apples to apples information that leads to significant gains in competitive advantage. It is how we
leverage knowledge.
Price Waterhouse’s International Business Language was derived from the Michael Porter value chain concept
and expanded to create a common business language. The International Business Language addresses nine
industry-specific value chains and process support areas as well as a multi-industry initiative. You can apply the
process support areas across all industries, since most organizations have similar support processes: human
resources, financial management, information systems, etc. An advantage of applying The International
Business Language to Price Waterhouse’s KnowledgeView databases is that it provides a system of mapping
that allows similar processes from all industries to be mapped—regardless of terminology—to a single process.
The Glossary of Terms presents and defines process areas, performance measures, enablers and topics that
support the Knowledge Information Transfer (KIT) database, the firm’s proprietary best practices database. For
an overview of the Knowledge Centre and databases, refer to the KnowledgeView Users Guide, available on-line
in KIT.
This Guide, when used in conjunction with the Process Taxonomy cards (see example on page 2), serves as a
reference to the pick lists used in the KIT database. The guide provides complete lists for processes,
measures, enablers, and topics, followed by sections that supply a succinct definition for each. Every industry
initiative supported in the database has its own unique pick lists and definitions, which you can obtain in written
form by contacting the Knowledge Centres at the numbers below, or can find as an attachment in the KIT
database and print off and/or refer to on-line as needed.
Great Knowledge Fully Shared is a key element in the firm’s strategy, and each Price Waterhouse professional
shares a responsibility to promote this concept. This responsibility includes identifying best practices and other
items for sharing via KnowledgeView. Instruction is available to enable you to abstract information into KIT or
you can submit documents for abstraction by mailing them to the Knowledge Centre in Dallas or the London
Bridge office.
Please direct your KnowledgeView questions or research requests to the Knowledge Centre in Dallas at
1-800-283-0547 or in London at 44-171-939-4555. Clients should direct their requests through their local PW
professional.

Preface 3
 Release 4.0
The International Business Languagesm
Managed Care Process Taxonomy
Value Chain Process Areas

Market & Sell Manage Care

(MA) (MC)

Manage Process Benefits Perform & Manage

Develop Products Providers/Networks and Claims Customer Service
(DP) (MN) (BC) (CS)

Support Process Areas

(BI) Perform Business Improvement

(EX) Manage External Relationships

(FA) Manage Corporate Services/Facilities

(FM) Manage Financials

(HR) Manage Human Resources

(LG) Manage Legal Services

(PM) Perform Planning/Management

(PO) Procure Materials/Services

(RC) Perform Regulatory/Compliance Reporting

(SY) Develop & Maintain Systems/Technology

The approach of value chain analysis to creating and
sustaining a firm's competitive advantage was devel-
oped by Professor Michael Porter of the Harvard
Business School and has been utilized extensively in
the business improvement consulting arena. It is based
on the premise that competitive advantage is gained by
optimizing the many discrete processes an organization
performs in designing, producing, marketing, delivering
and supporting its products and services.
The Value Chain concept is adapted in Price
Waterhouse's KnowledgeViewsm program as a model in
classifying and organizing business processes.
The six categories of Value Chain Process Areas
directly impact the product or service that a customer
consumes. The processes within this area are typically
operational in nature as opposed to support.
The ten categories of Support Process Areas are
typically considered customer indirect and can be
applied to all industries. A process within the Support
Process Areas can occur or apply to any of the Value
Chain Process Areas.
The classification of processes helps companies
organize and perform business improvement. This
categorization is used in the KnowledgeView program
to organize information and data supporting best
practices and great knowledge.
For more information on The International Business Language
or the KnowledgeView program, contact your local PW
professional or the Knowledge Centre in Dallas at
1-800-283-0547, or in London at 44-171-939-4555.

4 Managed Care Process Taxonomy

Managed Care Process Areas Pick List
A process is a group of workflows or tasks that add value to inputs to produce or provide an output or outcome.
Arranged in alphabetical order by prefixes. These prefixes are used to group individual processes in a hierarchical
or process order around the supra-processes.
BC-Adjudicate Claims
BC-Audit Claims Process
BC-Distribute Reimbursements
BC-Resolve Disputed Claims
BI-Assess Existing Organizational Structure/Culture
BI-Design & Maintain New Organizational Structure
BI-Develop & Maintain Benchmarking Process
BI-Develop & Maintain Continuous Improvement
Process
BI-Develop & Maintain Cross Functional Work Teams
BI-Develop & Maintain Knowledge Management
Process
CS-Distribute Enrollment Materials
CS-Enroll Members
CS-Handle Patient/Customer Inquiries/Complaints
CS-Invoice Customer
CS-Maintain & Process Member/Group Eligibility
Roles
CS-Maintain & Support Services/Products
CS-Measure Customer Satisfaction
DP-Design & Develop Products/Services
DP-Design & Implement Manufacturing/Service
Delivery Processes
DP-Develop & Maintain Product Pricing
DP-Develop Product Concept
DP-Ensure Compliance
DP-Evaluate Product Market
DP-Manage Product Configuration/Customization
DP-Plan Schedule & Manage Product Introductions
EX-Manage Community/Public Relationships
EX-Manage Government/Regulatory Relationships
EX-Manage Investor Relationships
EX-Manage Institutional Relationships
EX-Manage Strategic Relationships
EX-Manage Tax Regulatory Relationships
FA-Develop & Administer Records Management
Program
FA-Manage & Maintain Facilities
FA-Perform Corporate Secretary Function
FA-Plan & Obtain Facilities
Managed Care Process Areas Pick List
FM-Ensure Reserve Compliance
FM-Establish Loss Provisions
FM-Establish State Guaranty/Statutory Reserves
FM-Evaluate & Manage Financial Performance
FM-Manage Cash
FM-Manage Financial Policies & Procedures
FM-Manage Internal Audits
FM-Manage Internal Controls
FM-Monitor Risk Pools & Claim Liability Exposure
FM-Obtain Financing
FM-Perform Capital Allocation
FM-Perform Closings
FM-Perform Cost Management
FM-Perform Cost Accounting & Control
FM-Perform Fixed Asset Management & Accounting
FM-Perform General Accounting
FM-Perform Intercompany Billing/Administration
FM-Perform Planning/Budgeting/Forecasting
FM-Perform Profitability Measurement
FM-Perform Reserve Valuation
FM-Perform Risk Pool Settlements
FM-Perform Third-Party Payor Settlements
FM-Process Accounts Payable
FM-Process Expense Reimbursements
FM-Process Payroll
FM-Process Taxes
FM-Provide Financial Reporting
FM-Provide Regulatory Reporting
FM-Reconcile A/R
HR-Appraise & Recognize Performance
HR-Design/Define Corporate Culture
HR-Develop Career Path Structure
HR-Develop & Implement People Sourcing/Selection
Strategies
HR-Develop & Implement Succession Plans
HR-Develop Job Design
HR-Develop & Manage Compensation Program
HR-Develop & Manage Employee Orientation/
Deployment
HR-Develop & Manage Family/Work Strategies
HR-Evaluate Mergers/Acquisitions Personnel Issues
HR-Manage & Administer Benefits
HR-Manage Employee Communication
HR-Manage Employee Transfer/Relocation
HR-Manage Expatriates
HR-Manage Voluntary/Involuntary Separation
HR-Plan & Deliver Employee Training/Development
5
LG-Develop & Perform Preventive Law Programs
LG-Ensure Compliance
LG-Manage Outside Counsel
LG-Negotiate & Document Agreements/Contracts
LG-Perform Contract Administration
LG-Protect Intellectual Property
LG-Provide Legal Advice/Counseling
LG-Resolve Disputes/Litigation
PO-Appraise & Develop Suppliers
PO-Order Materials/Services
PO-Select Suppliers & Develop/Maintain Contracts
PO-Track Vendor Costs (Current/Historical)
RC-Maintain Compliance Function
RC-Manage Regulatory Examinations
RC-Perform State Filings

MA-Create Customer Communications Materials SY-Design/Construct Applications

MA-Develop Advertising Strategy/Materials
MA-Develop Proposals
MA-Establish & Manage Sales Distribution Channels
MA-Identify & Define Target Market Segments
MA-Perform Market Assessment
MA-Sell Products/Services
MC-Deliver Care
MC-Develop & Implement Disease Management/
Demand Management Programs
MC-Develop Implement & Maintain Care
Management Information Systems
MC-Develop Treatment Protocols
MC-Perform Outcomes Measurements/Utilization
Review
MN-Develop & Maintain Provider Compensation
Strategy
MN-Develop & Maintain Provider Networks
MN-Develop Network Communications Infrastructure
MN-Manage Physician Practices
MN-Monitor Care Delivery/Provider Performance
MN-Monitor Compliance
MN-Monitor Provider Network Adequacy
SY-Develop Communications Architecture
SY-Develop Computing Platform Architecture
SY-Develop Data Architecture
SY-Develop Hardware/Software Requirements
SY-Develop & Maintain On-Line Data Exchange
Capability
SY-Develop & Maintain Systems Documentation
SY-Develop Maintain & Administer Security
SY-Develop Standards
SY-Evaluate Select & Purchase Hardware/Software
SY-Identify Business Strategies/Opportunities
SY-Implement/Deploy Applications
SY-Maintain/Enhance Applications
SY-Monitor & Track Systems/Technology Status
SY-Operate IS Resources
SY-Plan Applications’ Architecture
SY-Test Applications

PM-Develop Capital/Investment Plan

PM-Develop Credit Policy
PM-Develop IT Strategic Plan
PM-Develop & Manage Overall Organizational
Performance
PM-Develop Operating Plan
PM-Develop Strategic Business Plan
PM-Develop Tax Plan
PM-Develop Treasury Plan
PM-Execute Mergers/Acquisitions
PM-Manage Programs/Projects
PM-Manage Tax Plan
PM-Monitor & Update Plans
PM-Perform Business Portfolio Management
PM-Perform Market Assessment
PM-Plan Portfolio Composition

6 Managed Care Process Areas Pick List

Managed Care Value Chain Process Areas Definitions
Arranged in value chain order by supra-process prefix; individual processes listed in alphabetical order.
Process Benefits and Claims (BC)
BC-Adjudicate Claims: Compare claim data to
benefit design, member and provider eligibility,
and pricing methodology to determine amount of
payment.
BC-Audit Claims Process: Audit claim information
for financial, data entry, and clinical accuracy.
Includes audit for purposes of loss prevention.
Includes development and implementation of
audit procedures.
BC-Distribute Reimbursements: Develop and
maintain a mechanism to reimburse members
and/or providers for payable claims following
adjudication/benefits processing. Includes
development and production of EOB materials.
BC-Resolve Disputed Claims: Provide for a review
function of provider- and member-initiated
disputes of previously processed claims. Also
includes for production and mailing of customized
explanatory documentation which may be more
detailed than standard EOB materials.
Perform & Manage (CS)
Customer Service
CS-Distribute Enrollment Materials: Distribute
enrollment materials to members, groups or
through sales distribution channels.
CS-Enroll Members: Process new eligibility
information submitted by individuals or groups.
Perform other procedures as part of adding new
groups to the eligibility roles, including medical
screening. Refers primarily to adding entire,
usually new, groups. Compare to CS-Maintain
and Process Member/Group Eligibility Roles
CS-Handle Patient/Customer Inquiries/
Complaints: Maintain call centers and/or other
mechanisms to process customer inquiries and
complaints. Includes responding to inquiries/
complaints of employer benefit representatives.
CS-Invoice Customer: Developing and delivering
customer invoices and statements. Includes
invoices delivered to employers. This does not
include receiving of payments. See FM-Manage
Treasury
Managed Care Process Definitions
CS-Maintain & Process Member/Group Eligibility
Roles: Maintain database of membership.
Provide data to third party vendor. Process
termination from and additions to the eligibility
roles. Refers primarily to the day-to-day
processing of small numbers of member records,
measured as a percent of total group population.
Compare to CS-Enroll Members
CS-Maintain & Support Services/Products:
Includes educating patients/customers about the
care process. Distribution of informational/
educational materials.
CS-Measure Customer Satisfaction: Maintain and
develop measurements and procedures for
determining customer satisfaction, including
patients, providers, employers and other
stakeholders.
Develop Products (DP)
DP-Design & Develop Products/Services:
Developing the conceptual design, detailed
design and detailed physical specification for a
product. This includes product engineering,
formulation and design, regulatory testing and
approval, and cost estimation. Constructing and
testing prototypes of new product and service
concepts.
DP-Design & Implement Manufacturing/Service
Delivery Processes: Designing, testing,
improving and implementing new product and/or
service delivery processes to meet the
specifications detailed in the product design and
prototype. This includes determination of
manufacturing environment and technologies,
development of facilities, production procedures,
methodologies and practices.
DP-Develop & Maintain Product Pricing: Develop
and test pricing models and new product pricing
strategy, including network pricing. Includes any
underwriting activity undertaken for the purpose
of making pricing decisions for new products and/
or services.
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DP-Develop Product Concept: Determine product
features and attributes based on product market
evaluation and business objectives. Includes
researching needs of patient/customer and/or
market segments, and development of a patient/
customer profile(s). May include product concept
envisioning sessions. Includes prototyping and
test marketing, leading to a “go” or “no-go”
decision regarding further product concept
development.
DP-Ensure Compliance: Ensure compliance of new
products to all federal, state, and other regulatory
requirements. Obtain necessary approval/
certification from regulatory agencies. See also
LG-Ensure Compliance for legal issues of
compliance, and several processes within FM-
Financial Management.
DP-Evaluate Product Market: An estimation of
potential market size, current competitors and
their offerings to evaluate feasibility and/or
opportunity to offer new products.
DP-Manage Product Configuration/
Customization: Coordinating and managing
changes to existing product structures,
configurations, specifications and formulations.
Planning and executing changes to the
configuration or design of products/services.
DP-Plan Schedule and Manage Product
Introductions: Defining and managing project
plans for introducing new or changed products/
services. Developing and maintaining a New
Product Introduction schedule for the timing and
manufacture/execution of new or changed
products and services consistent with market
needs and expectations.
Market and Sell (MA)
MA-Create Customer Communications Materials:
Development and production of various
informational/educational materials intended for
distribution to providers, employers and
members, such as member enrollment materials
and provider network directories.
MA-Develop Advertising Strategy/Materials:
Development and production of advertising
campaigns/materials in support of sales of
current and new products/services. Does not
include development or creation of informational/
educational materials produced for members and/
or providers such as member enrollment forms
and provider directories. See MA-Create
Customer Communications Materials.
8 Managed Care Process Definitions
MA-Develop Proposals: Develop client-specific
materials to aid in the sale of products and
services, as in response to an RFP, RFI, or RFQ.
MA-Establish & Manage Sales Distribution
Channels: Develop a network of sales resources,
for direct, group and/or brokered business.
Includes sales strategy development,
compensation/commission schedules, sales
force training, performance evaluation methods,
and administrative, technical, and promotional
functions performed in support of the sales force.
Monitor compliance of sales agents/brokers to
regulatory requirements. Includes production and
distribution of sales-supporting communication
media. Does not include the distribution of
medical products or services. Compare to MC-
Deliver Care.
MA-Identify & Define Target Market Segments:
Segment market into differentiable populations.
This includes market analysis, patient/customer/
employer focus groups, surveys, interviews and
evaluation of patient/employer base
demographics. Determine which segments will be
targeted. Identifying and measuring patient/
customer needs, wants, and preferences on an
on-going basis. Compare with DP-Evaluate
Product Market, which is undertaken for new
product/service development.
MA-Perform Market Assessment: Performing
periodic review of existing markets, leading to
possible market expansion, market withdrawal, or
continuance of current strategy. Initially, the
decision to reevaluate a current market would
most likely begin at a strategic level— see PM-
Perform Market Assessment—after which the
actual assessment would be performed by the
marketing function.
MA-Sell Products/Services: Providing an
opportunity for employers and other customers,
including individuals, to purchase products and/or
services. Includes pricing negotiations. May also
include work done to prepare for a sale, such as
prospecting, proposal writing, as well as work
required to close or finalize a sale.
Manage Care (MC)
MC-Deliver Care: Perform medical services
according to applicable treatment protocols.
Includes services performed at/by multiple sites/
providers as the patient/customer moves through
the healthcare delivery system.
MC-Develop & Implement Disease Management/
Demand Management Programs: Includes
proactive effort by payers to reduce overall
health care expenditures by educating providers
and members on appropriate treatment protocols
and level of care decisions.
MC-Develop Implement & Maintain Care
Management Information Systems: Collection
and dissemination of information used for clinical
as well as business process decision support.
Includes development and implementation of
patient records systems, in either paper or
electronic form.
MC-Develop Treatment Protocols: Develop
treatment protocols which specify accepted
treatment procedures as well as the decision-
making methodologies which lead to those
treatments.
MC-Perform Outcomes Measurements and
Utilization Review: Measure the consequences
of a given course of treatment. Also includes the
comparing of actual utilization levels to internal
and/or external benchmarks. Includes the
establishment of policies and procedures for
conducting the measurements and reviews.
Monitor compliance to treatment protocols.
Metrics may include inpatient days per thousand,
inpatient admissions per thousand, readmissions,
etc...Includes measurements using economic,
therapeutic and/or quality of life metrics.
Manage Providers/Networks (MN)
MN-Develop & Maintain Provider Compensation
Strategy: Includes development of payment
methodology for all provider types. Also includes
actuarial work necessary to determine premium
rates, capitation rates, etc.
MN-Develop & Maintain Provider Networks:
Develop networks based upon market analysis,
including pricing and compensation schemes for
network providers. Includes contract
administration and provider credentialing, and
development of contract template(s).
Managed Care Process Definitions
MN-Develop Network Communications
Infrastructure: Includes the development and
implementation of processes and infrastructure
for communicating information to network
providers, such as provider manuals and other
forms of regular communication. Includes
creation of provider relations staff.
MN-Manage Physician Practices: Deals with all
aspects of acquiring/managing physician
practices. Includes: practice valuation (if the
practice is being sold outright to a PPM
company), identification of information
technology needs, staffing requirements,
contractual agreements (non-compete clauses,
long term contracts between physicians and
PPM).
MN-Monitor Care Delivery/Provider Performance:
Develop and implement measurements for
provider profiling, focusing on individual and
organized groups of providers as opposed to an
entire network. Usually includes methods to
identify outliers and/or non-compliance to policies
or procedures, as well as policy for dealing with
non-compliance.
MN-Monitor Compliance: Includes monitoring of
providers to ensure ongoing compliance with all
federal, state, and other regulatory requirements.
Includes, for example, review of providers for
compliance with provider quality standards and
review of provider compensation strategies. See
also LG-Ensure Compliance, and several
processes within FM-Financial Management.
MN-Monitor Provider Network Adequacy: Develop
and implement measurements for determining
overall network performance. Includes monitoring
network providers for compliance to policies and
procedures; adequacy of network coverage, i.e.
average distance between members and network
providers, number of members per provider;
percentage breakdown of specialist physicians
vs. primary care; number of physicians per
specialty group.
9
Perform Business Improvement (BI)
BI-Assess Existing Organizational Structure/
Culture: Gauging the overall effectiveness and
efficiency of an enterprise; determining whether
the right work (value-added work that meets the
needs of the customer) is being performed,
resulting in the achievement of quality results.
Five tools associated with performing this task
are: decision and responsibility matrices, span of
control analysis, level/depth analysis, staff level
ratios, and work force profiles. Determining the
structural framework of an organization
(hierarchical, matrix, customer-aligned,
geographically aligned, horizontal, etc.) can also
be a part of performing this process.
BI-Design & Maintain New Organizational
Structure: Designing a suitable organizational
structure, including division of work, so as to
optimize performance and achieve performance
targets. The design must reflect the balance
among organizational alternatives needed to
accommodate the work, culture and workforce
structure. Tasks can involve providing new job
descriptions as well as ensuring that the needs of
the customer are reflected in new processes and
work tasks.
BI-Develop & Maintain Benchmarking Process:
Developing, implementing and supporting intra-
and interindustry benchmarking programs. This
includes benchmarking training, best practice
research, development of survey instruments,
identifying benchmarking partners, conducting
partner screening, performing site visits and
analyzing, interpreting, and adapting in response
to benchmarking findings.
BI-Develop & Maintain Continuous Improvement
Process: Developing, implementing and
supporting continuous business improvement in
the areas of process, people, structure, and
technology. This includes the development of an
ongoing improvement program that monitors
quality, efficiency and responsiveness of the
organization to both internal and external
changes.
BI-Develop & Maintain Cross Functional Work
Teams: Develop, implement and support cross-
functional work teams across the business
landscape. This includes the assignment of
business/process experts from various resource
groups on teams dedicated to building solutions.
10
BI-Develop & Maintain Knowledge Management
Process: Creating, sharing, and measuring
leveragable knowledge within an organization.
Knowledge Management is a comprehensive
program for companies who wish to ensure that
the perception of their current and future value is
based not only upon standard accounting
practices, but also upon their capabilities, know-
how and ability to capitalize on learning
opportunities.
Manage External Relationships(EX)
EX-Manage Community/Public Relationships:
Creating and managing the community and public
perception of an organization. This includes
developing and managing media relations, direct
communication with the public, and controlling
indirect sources that impact the company image.
EX-Manage Government/Regulatory
Relationships: Managing communications and
relations with federal, state and local
governments, as well as international political
and trade organizations. This includes lobbying,
public relations, and networking. Does not include
compliance issues. See LG-Ensure Compliance,
and several processes within FM-Financial
Management.
EX-Manage Institutional Relationships:
Developing, managing and coordinating the
relationships with institutions and private parties
in a lending/borrowing/investing capacity.
EX-Manage Investor Relationships: Managing the
communications and facilitating the relationship
between corporate investors and the business
enterprise. This includes the development of a
relationship strategy and plan. The corporate
investors could include stockholders, financial
analysts and fund managers.
EX-Manage Strategic Relationships: Developing
and managing strategic partnerships with
competitors, vendors, and sub-contractors. This
includes developing complementary products/
services, providing input to vendors on how they
can improve their products; partnering with
vendors to benefit the business.
EX-Manage Tax Regulatory Relationships:
Managing relationships with advisors/service
providers, business units and tax authorities;
reviewing legislative initiatives; reviewing and
managing tax audits; identifying and utilizing in-
house/external tax experts; and maintaining
communication with commercial directors and
management.
Managed Care Process Definitions
Manage Corporate (FA)
Services/Facilities
FA-Develop & Administer Records Management
Program: Maintaining a records management
program in accordance with legal requirements.
Includes developing a master records retention
schedule, conducting research into federal and
state regulations, and educating employees on
records management guidelines. Also includes
management of electronic files and records, and
maintaining confidentiality of patient records.
FA-Manage & Maintain Facilities: Coordinating and
maintaining administrative, production and other
owned and leased facilities, including repair/
remodeling, security, and owner/lessee relations.
FA-Perform Corporate Secretary Function:
Coordinating and organizing an organization’s
relationships with the Board of Directors and
corporate investors. Includes organizing annual
shareholder meetings, recording and publishing
meeting minutes, and maintaining and filing
appropriate legal documents.
FA-Plan & Obtain Facilities: Planning facilities
includes designing and constructing structures.
Obtaining facilities includes purchasing or leasing
structures.
Manage Financials (FM)
FM-Ensure Reserve Compliance: The process of
monitoring state guaranty and statutory reserves
to ensure compliance with regulatory
requirements. Includes development of policies
and procedures to report and correct non-
compliance.
FM-Establish Loss Provisions: Involves the
calculation and reporting in financial statements
of provisions or reserves to be set aside for
losses, resulting when medical claim liability
exposure is greater than anticipated, as when
IBNR is incorrectly calculated.
FM-Establish State Guaranty/Statutory Reserves:
Involves the establishment of reserves placed on
deposit to satisfy regulatory requirements.
FM-Evaluate & Manage Financial Performance:
Evaluating the financial performance of products,
investments or organizations and/or assessing
the financial impact of business decisions. This
would include measuring performance against
predetermined targets and managing the
corrective action process.
Managed Care Process Definitions
FM-Manage Cash: Managing the organization’s
operational cash flow, cash-equivalents, cross-
currency transactions and related issues,
preparing cash flow targets, and financial
currency reporting.
FM-Manage Financial Policies & Procedures: This
process includes controlling and updating the
policies and procedures relating to financial
management, establishing service level
agreements with internal customers/suppliers and
external financial service providers and
maintaining the financial procedures manual.
FM-Manage Financial Risk: Evaluating and
controlling financial risk associated with
investment and business opportunities, including
the use of derivative instruments such as swaps,
futures, forward contracts, options, etc; for
managing the business risk factors (liquidity risk,
interest rate risk, and foreign exchange risk) and
economic exposure associated through the
monitoring of policy compliance and managing of
funding activities.
FM-Manage Internal Audits: Conducting and
managing an organization’s internal financial audit
process.
FM-Manage Internal Controls: Ensuring that
internal control procedures are in place to cover
all assets & liabilities of the organization.
Measuring compliance with controls and
managing the process of corrective action.
FM-Monitor Risk Pools & Claim Liability Exposure:
Involves the monitoring of several potential areas
of financial exposure, especially those related to
the providing of medical services. Major areas of
exposure include medical claims liability, as well
as exposure from ‘pools’ of risk shared between,
for example, the managed care organization and its
providers, particularly those who are under
capitated arrangements. Includes development and
implementation of procedures for conducting the
monitoring of such exposure.
FM-Obtain Financing: Planning and acquiring
financing from external sources.
FM-Perform Capital Allocation: This process
involves the identification of needs, development
of business unit investment proposals and
subsequent appraisal of proposals, and final
prioritization/approval/rejection of those proposals.
FM-Perform Closings: Developing and implementing
policies and procedures used to support the
consolidation process. This includes all operational
activities performed to close the books on a
monthly, quarterly, and yearly basis.
11
FM-Perform Cost Accounting & Control:
Developing and implementing methods and
models for the allocation of operating and
overhead costs across products and/or services.
This is typically used to evaluate and control
product/service pricing, profitability and trends.
FM-Perform Cost Management: Developing an
implementing methods and approaches for cost
driver analysis, benchmarking, business process
improvement, asset resource deployment/
utilization and value driver evaluation. Critical
success factors and performance indicators for
the business should be integrated with activity
based measures.
FM-Perform Fixed Asset Management &
Accounting: Developing and implementing
procedures relating to capital budget decisions
and depreciation. Maintaining fixed asset records
including acquisitions and disposals.
FM-Perform General Accounting: Managing an
organization’s ongoing financial records. This
includes maintaining the chart of accounts,
processing journal entries and adjustments to the
organization’s general ledger accounts.
FM-Perform Intercompany Billing/Administration:
Developing and implementing procedures and
agreements between multiple organizations and
units within a company to support sharing of
costs. This includes transfer pricing and other
internal billing.
FM - Perform Planning / Budgeting / Forecasting:
Identification of business trends, establishing
KPI’s (key performance indicators) from
benchmarking analysis and organizational CSF’s
(critical success factors), developing plans,
budgets and forecasts to guide towards
organizational performance goals.
FM-Perform Profitability Measurement: Assessing
the profitability of customers/relationships or
products/services.
FM-Perform Reserve Valuation: Determining the
amount of medical claims liability as well as the
appropriate reserves to cover periodic losses.
Includes the actuarial analyses required to make
such determinations.
FM-Perform Risk Pool Settlements: Involves the
calculation and reporting in financial statements
of provisions or reserves to be set aside for risk
pools established under capitation-type contracts.
One type of risk pool is designed to assist
12
providers with defraying the cost of unusually
costly cases. Another type of risk pool involves
dollars withheld by the payer or managed care
organization to provide an incentive for meeting
certain utilization targets through gain-sharing or
loss sharing.
FM-Perform Third-Party Payor Settlements:
Involves the calculation and reporting in financial
statements of estimates pertaining to contracts
under which the provider is reimbursed or paid at
interim rates, with a final amount to be
determined after the close of the contract year.
Includes the recording of interim financial
statement adjustments as needed and the
preparation of year-end cost reports.
FM-Process Accounts Payable: Processing
payments of operating expenses and other
vendor charges. This includes the development of
polices and procedures for the processing of
payables and all operations. This process is often
supported by key technology enablers.
FM-Process Expense Reimbursements:
Processing of advancements and
reimbursements for employee expenses on the
organizations behalf. This process often linked
with the processing of accounts payable. This
process also includes development and use of
policies and procedures regarding
reimbursements.
FM-Process Payroll: Development of procedures for
processing of paychecks and payments to
employees. This process is often a part of
accounts payable.
FM-Process Taxes: Determining tax obligations,
timing of payments, and processing actual tax
payments, including preparation of appropriate
filing forms. Manage ex-pat taxation process, tax
plan compliance and calculation/review of group
tax charge.
FM-Provide Financial Reporting: Compiling
financial data and developing corporate or unit
financial reports.
FM-Provide Regulatory Reporting: Compiling data
and developing reports to satisfy regulatory
requirements.
FM-Reconcile A/R: Involves reconciliation of
accounts receivable with the latest, preferably
real time information on membership counts and
disenrollments so as to achieve a more accurate
record of receivables.
Managed Care Process Definitions
Manage Human Resources (HR)
HR-Appraise & Recognize Performance: The
development and implementation of procedures
for providing employee coaching/mentoring,
including employee performance appraisals,
avenues for feedback, upward appraisals and
employee recognition programs other than
compensation or performance based bonus. This
includes managing performance planning and
developing performance management.
HR-Design/Define Corporate Culture: Defining and
developing an overall corporate cultural model
resulting in modified behavior that effects long-
term economic impact on the organization. This
includes the development and implementation of
management techniques, focus on customers,
employees, and/or shareholders.
HR-Develop Career Path Structure: Create or
revamp the criteria and requirements to be met
by staff in order to accomplish professional
growth within the organization. The structure
defines the company hierarchy through which
employees move at a pace that strives to
maximize the benefit for both the employee and
the organization. This includes developing and
managing promotional orientation. (For designing
pay structure or compensation, see HR-Develop
and Manage Compensation Program)
HR-Develop & Implement People Sourcing/
Selection Strategies: Sourcing refers to the
identification of labor “pools” to fill job requirements.
This includes new employees, outsourcers,
temporary labor, consultants, and advisors.
Sourcing also includes the methods used to attract
these labor pools by utilizing search firm,
advertisements, college recruiting/intern programs,
and the use of electronic/Internet recruiting
methods. Sourcing includes the internal
identification and transfer of employees to fill job
requirements, and is linked to the processes of
succession planning, and training and
development. Selection refers to the process of
determining the “right” people to fill job positions
through interviewing, assessing and choosing from
among applicants. Selection includes designing
job skill and competency requirements to develop
selection criteria and assessment methods, and
more routine processes like establishing medical
background, conducting reference checks,
electronic tracking methods (to ensure qualified
candidates are tracked), and managing offers. This
process includes the selection of outside labor
pools like outsourcers, temporary employment
firms, consultants, etc.
Managed Care Process Definitions
HR-Develop & Implement Succession Plans:
Creation of plans to identify replacement people
for specific positions and focus their
assignments and development on preparation for
those assignments.
HR-Develop Job Design: Create a position
description which outlines skills and
competencies, responsibilities, expectations,
professional experience, education level, required
for a particular position within the organization.
HR-Develop & Manage Compensation Program:
Develop salary structures and/or commission
programs and maintaining those programs to
ensure that strategic goals are being met when
compared against industry metrics. This includes
developing and implementing performance
measurement through monitoring key
employment indicators, reward systems and
incentive based compensation programs for
individual employees and/or teams as well as
performance based bonus systems.
HR-Develop & Manage Employee Orientation/
Deployment: Create programs for employee
introduction into the organization and position
assignment. Implement introduction programs for
employee familiarization with the policies and
procedures of the organization such as benefits
package, tax processing, electronic direct
deposit, as well as job specific information. This
includes orientation of temporary and contract
employees.
HR-Develop & Manage Family/Work Strategies:
Designing and implementing corporate practices
that recognize employees’ family obligations.
These include flexible work schedules, day care
programs, family leave, telecommuting, etc.
HR-Evaluate Mergers/Acquisitions Personnel
Issues: The Human Resource considerations that
occur during mergers and/or acquisitions. These
include due diligence, workforce compensation
liabilities, comparison of compensation/pension
plans and implementation or merging systems,
work processes, cultures, etc.
HR-Manage & Administer Benefits: Developing and
administering employee benefits such as health
insurance, retirement plans, managing health and
wellness programs, as well as managing other
employee assets. This process also includes
benefits, open enrollment and benefits
reconciliation.
13
HR-Manage Employee Communication: Managing
communication (of position, policy, outlook, etc.)
between management and employees.
Developing and implementing formal systems for
soliciting employee suggestions. Developing and
implementing formal procedures for managing
employee grievances. This may include external
arbitration. This includes all internal charges of
discrimination and unfair labor practices, but
does not include union grievances.
HR-Manage Employee Transfer/Relocation:
Process domestic employee movement within
the organization, including administration of
physical transit, housing, and compensation
issues. For international transfers see HR-
Manage Expatriates.
HR-Manage Expatriates: Administration of
processes resulting from employees who
temporarily transfer internationally within the
organization. This includes issues unique to
expatriates such as licensing, credit and tax, as
well as their compensation, relocation, benefits,
cultural training, etc. For domestic transfers see
HR-Manage Transfer/Relocation.
HR-Manage Voluntary/Involuntary Separation:
Processes associated with employee
termination, resignation, retirement, or other
absence. These include extended leave of
absence, sabbaticals, and statutory legal
requirements. This process also includes all
issues regarding outplacement.
HR-Plan & Deliver Employee Training/
Development: Developing and implementing
employee training programs, including cross-
training and personal development programs.
These include self-instruction, computer-based
training, performance-based training, employee
life planning, and other employee assistance
services.
Manage Legal Services (LG)
LG-Develop and Perform Preventive Law
Programs: Developing and conducting
preventive law programs for business unit
employees of the organization. This includes
developing written materials and training
programs, participating in business area
seminars, and meeting informally with business
unit managers and employees to review and
discuss legal guidelines related to business
operations.
14
LG-Ensure Compliance: Ensuring organizational
compliance with laws, regulations, and industry
and company policies. This process involves
developing control objectives, documenting
control policies and procedures, assigning
compliance responsibilities within the
organization, and responding to requests for
information from regulatory agencies. Major areas
of concern include ERISA compliance, federal
anti-trust regulations, state-specific HMO
regulations, and anti-fraud legislation.
LG-Manage Outside Counsel: Coordinating and
developing outside counsel relationships for the
organization. Involves managing the selection
and retention process, monitoring the quality of
legal work product, working jointly with outside
counsel on specific matters, and controlling and
approving legal fees.
LG-Negotiate & Document Agreements/Contracts:
Negotiating and drafting documents or deal-
specific clauses in written agreements entered
into by the organization with outside vendors,
suppliers, consultants, investors, etc...Can
include conducting research applicable to the
agreement, and working directly with business
managers and outside parties to clarify contract
specifications and language. Also includes
documentation of lending and other financial
transactions. Contracts specific to core service
providers—physicians, hospitals, outpatient
clinics, etc.—are also part of MN-Develop &
Maintain Provider Networks.
LG-Perform Contract Administration:
Administering and maintaining contracts
produced by LG-Negotiate & Document
Agreements/Contracts.
LG-Protect Intellectual Property: Managing and
controlling the patent and trademark function for
the organization. Includes approving invention
records, monitoring the filing process,
maintaining relationships with Patent and
Trademark Office personnel, administering all
related payments, and tracking renewals.
LG-Provide Legal Advice/Counseling: Evaluating
and advising on the legal risk associated with
business opportunities. This includes dealing
directly with business managers, understanding
the implications of business activities in the
regions where business operations occur, and
promoting the organization’s best interest in
pursuing its objectives and strategies.
Managed Care Process Definitions
LG-Resolve Disputes/Litigation: Preparing for and
participating in the resolution process of disputes
(e.g., malpractice, product liability, governmental
investigation, commercial, employment, tax).
Involves developing response strategies,
evaluating alternative dispute resolution
techniques, early case analysis, preparing answers
to claims and complaints, conducting necessary
fact-finding and discovery, coordinating with
outside counsel, and negotiating final settlements
and agreements.
Perform Planning/Management (PM)
PM-Develop Capital/Investment Plan: This planning
is to ensure effective allocation of scarce capital
and human resources to investment opportunities
in a manner which optimizes shareholder value and
achieves new/sustained competitive advantage;
determining strategic investment strategy and
investment funding priorities of the business.
PM-Develop Credit Policy: Determining the standards
used to measure creditworthiness in extending
credit to borrowers and developing policies and
procedures to ensure those standards.
PM-Develop IT Strategic Plan: Envisioning the
technology and applications needed to meet the
business’ direction. This requires an understanding
of the current business direction and preparing the
IT strategies needed to meet the business units’
needs. The business is the driver. For example,
let’s say the business units would like to expand
their market to become truly global. IT may need
to prepare to be able to serve a global sales force
or a multi-lingual customer base.
PM-Develop & Manage Overall Organizational
Performance: Developing and implementing
systems for managing the overall performance of
an organization, by integration with value based
management and financial strategy and planning
targets.
PM-Develop Operating Plan: Developing specific
operating requirements/procedures for pursuing
defined strategic initiatives.
PM-Develop Strategic Business Plan: Developing the
strategic direction/initiatives required to achieve
broad, fundamental business objectives; performing
shareholder value analysis and competitor
benchmarking; developing financial SVA targets at
the corporate and individual business unit level;
performing strategic financial planning through
proper communication of financial targets and
ensuring that the financial plan is in sync. with the
business portfolio plan.
Managed Care Process Definitions
PM-Develop Tax Plan: This process involves
evaluating the impact of strategic options,
defining tax objectives, evaluating the efficient
use of the company tax profile and tax
legislation, preparing the tax section within the
strategic plan, and communicating tax issues to
the organization.
PM-Develop Treasury Plan: Developing of the
strategic treasury plan, treasury operating plan,
the overall financial plan, treasury performance
targets, treasury control targets (physical
controls and exposure limits) for treasury’s own
area and for the interface with the overall
business.
PM-Execute Mergers/Acquisitions: Includes
partner/target selection and evaluation, valuation,
due diligence efforts, and all necessary
regulatory filings.
PM-Manage Programs / Projects: Preparing
detailed project workplans and resource/cost
estimations, approving and authorizing project
plans and associated costs, and managing and
monitoring the project plan over the full life of the
project.
PM-Manage Tax Plan: Managing the effects of
international taxation and other initiatives eg.
determining inter-company transfer pricing,
calculating the tax charge within the strategic
plan, and preparing and reviewing monthly/
quarterly tax plan status reports. Includes
managing tax projects over the full life cycle.
PM-Monitor & Update Plans: Developing and
implementing procedures for monitoring and
documenting progress compared to plan, refining
and adjusting the plans applicable to strategy -
operations - tax, and performing periodic external
competitor benchmarking.
PM-Perform Business Portfolio Management:
Developing the business portfolio plan,
determining and evaluating strategic options and
decisions, and appraising a portfolio’s value
performance and potential.
PM-Perform Market Assessment: A periodic review
of markets currently serviced by the organization
from a strategic level. May lead to a decision on
market expansion, market withdrawal, or
continuance of current strategy in a given market.
See also MA-Perform Market Assessment.
PM-Plan Portfolio Composition: Determining
components of the loan or asset portfolio.
Includes the type of loans, size of loans,
customers, regions, industries, and
creditworthiness.
15
Procure Materials/Services (PO)
PO-Appraise & Develop Suppliers: Developing and
managing programs and policies for interacting
with suppliers and measuring/improving their
performances. This includes supplier management
activities such as vendor rating and supplier
development programs. This includes suppliers of
services such as contract programming, catering,
entertainment, etc.
PO-Order Materials/Services: Planning, ordering and
executing the physical delivery of materials and
services from suppliers to the point of use. This
includes managing and performing call off
schedules against previously negotiated and
documented contracts and processing ad hoc
purchase orders.
PO-Select Suppliers & Develop/Maintain Contracts:
Identifying and qualifying sources. Development of
selection criteria and the use of these to select
appropriate suppliers. Development/
communication of technical and commercial
requirements to suppliers and structuring of
Invitations to Tender. Negotiating and drafting
contracts, encompassing all commercial
requirements of the supplier, for the supply of
goods/services. Ongoing management of supply
contracts.
PO-Track Vendor Costs (Current/Historical): Build
and maintain the capability to pinpoint all costs
and expenses related to any service or material
vendor. This capability produces information about
active, current, and past vendors.
Perform Regulatory/ (RC)
Compliance Reporting
RC-Maintain Compliance Function: Establish team of
administrators and lawyers to establish and maintain
a framework for compliance with regulatory
requirements, the company’s code of ethics and to
investigate and resolve compliance matters.
RC-Manage Regulatory Examinations: Establish a
system for proper notification of compliance matters
to the appropriate level of management, through
periodic scheduled and ad hoc reports. Report
matters to the appropriate regulators, where required.
RC-Perform State Filings: Submit product filings and
informational requests to the various state insurance
departments and/or SEC, as appropriate. Includes
submission of financial, actuarial, product and
company informational filings.
16
Develop & Maintain (SY)
Systems/Technology
SY-Design/Construct Applications: Determining
on-line versus batch processes; identifying
elementary processes and data manipulation
logic. Developing program level specifications;
window, screen, and report layouts; interface
definitions; system messages, develop and
define prototype application. Developing
executable code, including generated code, for
the programs in the application based on the
design. This includes building and testing
prototypes.
SY-Develop Communications Architecture:
Preparing, implementing and reviewing an overall
corporate strategy for communications systems
(hardware and software) including data, voice,
fax, electronic messaging, and Internet/intranet.
This includes all items relating to the design and
implementation of a network architecture.
SY-Develop Computing Platform Architecture:
Preparing, implementing and reviewing a
corporate or systems level strategy for the
hardware and operating systems to be used and
the configuration approach for implementing
them. This includes all items relating to the
design and implementation of the testing and
production environments. (The network
architecture items are under SY-Develop
Communications Architecture.)
SY-Develop Data Architecture: Preparing,
implementing and reviewing an overall corporate
strategy for who owns the data; how data will be
maintained; and where it will reside and in what
format. Includes data modeling, design and
maintenance of meta data repository and data
dictionaries. The word data applies to business or
development objects and components as well as
actual data values.
SY-Develop Hardware/Software Requirements:
Preparing a list of user requirements for hardware
products and software applications based on
interviews, surveys, facilitated sessions,
structured analysis, fit analysis for application
packages, rapid prototyping or other information
gathering mechanisms. (Software includes user
applications, packages or custom, as well as
development support tools. Hardware includes
infrastructure related products as well as
business unit hardware needs.)
Managed Care Process Definitions
SY-Develop & Maintain On-Line Data Exchange
Capability: Involves development and
maintenance of systems which allow
communication between the client and managed
care organization. Also provides for the transfer
of eligibility files, and the ability for the client to
perform real-time queries on benefit design and
claims and provider information.
SY-Develop & Maintain Systems Documentation:
Supporting users/technical staff by preparing and
maintaining documentation/reference materials
for systems developed, packages implemented,
and hardware installed. This documentation can
be in various formats; for example: paper,
electronic, multi-media, video, etc.
SY-Develop Maintain & Administer Security:
Creating and maintaining systems and
procedures to prevent sources, internal and
external, from gaining unauthorized access to
data, facilities, systems that require protection.
Can be achieved through the implementation of
passwords to preclude entrance by specific users
to facilities, networks, databases, views, etc.
Also includes the construction and maintenance
of fire walls to ensure that access to a network
cannot be attained from other networks or the
Internet.
SY-Develop Standards: Developing, implementing
and refining corporate or systems level standards
(documentation, development, naming
conventions, etc.). This includes development of
systems, methodologies and guidelines to follow.
Documenting these standards and educating the
IT employees on their use. Update these
standards as warranted by the availability of new
technologies.
SY-Evaluate Select & Purchase Hardware/
Software: Utilizing the requirements to determine
a ‘short list’ of products to consider. This can be
done via demos, contacting references,
benchmarking statistics, and other forms of
research. Pilot where appropriate in an effort to
prove that it meets the defined requirements and
fulfills all of the vendor’s claims. Negotiate
pricing including maintenance/support and
training costs. Purchase product(s).
Managed Care Process Definitions
SY-Identify Business Strategies/Opportunities:
Investigating and presenting new business
strategies/opportunities enabled by emerging
technologies. In this process, technology is the
driver of the opportunity rather than the business
units. IT presents to the business units new
business opportunities that are enabled by
emerging technologies. For example, some data
warehouses contain customer information that is
considered valuable outside of the organization.
Therefore, some IT departments are now selling
this information to other organizations. This is
made possible by new hardware advances that
increase data capacity and throughput and
improved decision support systems that make
the data more usable to the business user.
SY-Implement/Deploy Applications: Preparing and
executing a plan to take the application ‘live’ or to
implement an upgrade to an application. This can
include data conversion; ‘decommissioning’ the
existing system; obtaining system ‘sign-off’; and
system turnover to the maintenance staff. This
process applies to in-house developed
applications as well as packaged/leveraged
applications.
SY-Maintain/Enhance Applications: Performing
maintenance tasks associated with the
application. This includes enhancements as well
as bug fixing, regulatory required updates,
system tuning, upgrades, etc. This process
applies to in-house developed applications as
well as packaged/leveraged applications.
SY-Monitor & Track Systems/Technology Status:
Managing the usage, performance, storage
capacity and age of software and hardware.
Producing plans for system/technology
refurbishment/replacement on a periodic basis as
required to support strategic operations.
SY-Operate IS Resources: Managing and
supporting the day-to-day operations of IT
resources. This includes backroom operations
such as mounting tapes and backing-up data in
all formats-file, database, server, etc. It includes
DASD administration tasks such as performance
monitoring and tuning. It includes network
administration tasks such as utilization
monitoring, addressing bandwidth issues, etc. It
also includes production scheduling, version
control, managing code libraries, and platform
monitoring and maintenance.
17
SY-Plan Applications’ Architecture: Preparing an
application level strategy to be used to develop
the application and support its production.
Decisions made during this process can include
2 tier versus 3 tier, fat client versus thin client,
Internet versus intranet, etc.
SY-Test Applications: Developing and executing
test plans to assure that the application will work
as intended. Involves designing and developing
a test environment. Includes unit, system,
integration, user, and volume/stress testing.
Also, includes tracking the problems that arise
during the testing phase.

18 Managed Care Process Definitions

Managed Care Enablers Pick List
Enablers are facilitators of implementing change. They can be found in any enterprise dimension: people and
culture, structure, processes, and systems of technologies. They should be identified and used to increase chances
of successful change implementation. Arranged in alphabetical order by prefix. Enablers are tools or approaches
used to improve performance. Enablers are coded to four major areas; (C) People and Culture, (S) Structure, (organi-
zation/physical), (P) Process, and (T) Technology.

Process Oriented (P)

P-ABC (Activity Based Costing)
P-Provider Profiling

Technology Oriented (T)

T-CHIN (Community Health Information Network)
T-Data Warehousing
T-Imaging Technology
T-Smart/Swipe Cards

Managed Care Enablers Pick List 19

Managed Care Enablers Definitions
Arranged in alphabetical order

P-ABC (Activity Based Costing): A method for

determining the cost of a product or service that
includes all related costs associated with
production. In contrast to traditional accounting
methods, activity-based costing usually breaks
out overhead costs at the product level.
P-Provider Profiling: Any of several activities which
intend to show provider behavior, particularly
regarding utilization, either as a snapshot or as
patterns over time. Provider profiling is often
used a measure of the effectiveness of various
utilization management efforts, and to identify
outlier providers.
T-CHIN (Community Health Information Network):
A structure that provides for the electronic
sharing of financial and clinical information
among a defined group of constituent entities,
including physicians, hospitals, payers,
employers, and regulatory agencies, among
others.
T-Data Warehousing: A data warehouse provides a
common repository for data gathered from and/or
generated by all parts of the organization,
primarily for purposes of decision support. The
typical data warehouse architecture consists of a
separate relational database of integrated
historical data, together with summarized
information customized into a series of smaller
relational or multi-dimensional departmental ‘data
marts.’
T-Imaging Technology: Technology which provides
for economical storage and retrieval of
information, relative to paper or microform
storage methods, by storing digitized images of
source documents, and making them available
across LANs, WANs, etc.
T-Smart/Swipe Cards: Technology which allows
patient/member account and/or benefit
information to be stored on a card carried by the
member. The card also would have the ability to
update that information as transactions occur.

20 Managed Care Enablers Definitions

Managed Care Topics Pick List
Arranged in alphabetical order.

Cost Containment
Disease State Management
HEDIS Reporting
M & A/Integration
Managed Care Information Systems (MCIS)
Medicare Risk Products
MSA (Medical Savings Account)
NCQA
Physician Practice Management

Managed Care Topics Pick List 21

Managed Care Topics Definitions
Arranged in alphabetical order.
Cost Containment: Issues involving cost
containment efforts in the managed care
industry.
Disease State Management: Managing an entire
disease state and the resultant costs as opposed
to a functional management approach. Involves
coordinating care for a given disease state
across the relevant components of a healthcare
delivery system.
HEDIS Reporting: Issues involving HEDIS reporting.
The Health Plan Employer Data and Information
Set, or HEDIS, is a uniform performance
reporting criteria developed in 1993 by the
NCQA.
M & A/Integration: Involves recent trend of
consolidation within the managed care industry.
Applies to payers and providers alike, who
benefit from economies of scale through mergers
and acquisitions, and increase financial and
service performance through integrating the
various functions of health care delivery.
Managed Care Information Systems (MCIS):
Information systems designed specifically for a
managed healthcare market, and capable of
handling the resultant new IS requirements such
as capitation calculation, risk sharing, etc. These
systems are differentiated by their more
traditional mainframe-based predecessors by
several criteria, including the following: 1) The
ability to capture data all along the continuum of
care, and capable of capturing patient data
equally well in any of several departments, as
opposed to just the admitting department, 2) data
staying with the patient, as opposed to data
being related to episodes of care, and 3) an
emphasis on analysis of outcomes as opposed
to treatment. An MCIS easily crosses functional
and organizational boundaries, and often includes
an enterprise-wide master patient index (MPI),
enabling physicians and other providers to make
clinical decisions in light of their financial
implications.
Medicare Risk Products: Any one of several
products whereby the insurer bears the risk by
agreeing to provide medical services to Medicare
enrollees in exchange for a fixed payment, rather
than fee for service.
22
MSA (Medical Savings Account): A concept which
provides a savings account to be used to offset
future medical expenditures. The savings
accounts would be funded with premium dollars
saved as a result of re-enrolling members into
higher-deductible plans. Proponents say such
accounts would encourage people to save for
future medical needs and create price awareness
among the population, since payment for low-
cost services would be made out-of-pocket.
Opponents say only healthy members would take
advantage of MSAs, leaving fewer premium
dollars to be spread over high-utilizing members.
NCQA: Issues involving the National Committee for
Quality Assurance, or NCQA, who provides
standards and offers accreditation for managed
health care plans.
Physician Practice Management: Involves the
acquisition of or affiliation with a physician
practice where the acquiring company or
contractor takes over all the back-office, non-
medical, operations within the practice. This
includes: billing, accounting, eligibility
verification, benefit verification, records keeping,
staffing, etc. PPM companies have different
acquisition strategies in that some focus on one
specialty (cancer care, vision, dental, pediatric)
while others target primary care doctors. Deals
can range from an outright sale of the practice to
long term contacting agreements with the
physicians retaining ownership.
Managed CareTopics Definitions
Managed Care Measures Pick List
Performance measures are data used for monitoring performance, usually expressed in terms of time, cost or quality.
Arranged in alphabetical order by prefix.

BC- Audit Claim Adjudication Process (Cost) FM-Accounts Payable (Amount Outstanding)
BC-Claim Payment (Accuracy) FM-Accounts Payable (Cost)
BC-Claim Payment (Cost) FM-Accounts Payable (Cycle Time)
BC-Claim Payment (Cycle Time) FM-Debt/Liabilities (Value)
BC-Claim Payment (Volume) FM-Equipment/Labor (Utilization)
BC-Headcount FM-Headcount
BC-Reinsurance Recoverable (Cost) FM-Manage Financials (Cost)
BC-Reinsurance Recoverable (Cycle Time) FM-Manage Treasury (Cost)
BC-Settlement (Cost) FM-Payroll/Expense Reimbursement (Cost)
BC-Settlement (Cycle Time) FM-Payroll/Expense Reimbursement (Cycle Time)
FM-Policy Valuation (Cost)
BI-Benchmarking (Cost) FM-Policy Valuation (Time)
BI-Benchmarking (Cycle Time) FM-Portfolio Assets (Cost)
BI-CI Effort (Cost) FM-Portfolio Assets (Time)
BI-CI Effort (Cycle Time) FM-Process Steps (Number)
BI-Layers of Management FM-Reporting (Accuracy)
BI-Organizational Change (Cost Reduction) FM-Reporting (Cost)
BI-Organizational Change (Cycle Time) FM-Reporting (Cycle Time)
BI-Organizational Change (Productivity)
BI-Organizational Change (Staff Reduction) HR-Human Resources (Cost)
BI-Span of Control HR-Absenteeism
HR-Compliance/Safety Violations
CS-Customer Satisfaction Rating (Volume/Frequency)
CS-Customer Service (Cost) HR-Employee Grievances (Volume/Frequency)
CS-Equipment/Labor (Utilization) HR-Employee Suggestions (Volume/Frequency)
CS-Headcount HR-Employee Suggestions Implemented (Value)
CS-Inquiries/Complaints (Volume/Frequency) HR-Employee Turnover
CS-Invoice Customer (Cost) HR-Headcount
CS-Invoice Customer (Cycle Time) HR-Labor (Utilization)
CS-Measure Customer Satisfaction (Cost) HR-Process Steps (Number)
CS-Process Steps (Number) HR-Training (Cost)
HR-Training (Cycle Time)
DP-Headcount HR-Training Cost Per Employee
DP-Process Steps (Number) HR-Training Development (Cost)
DP-Product Development (Cost) HR-Training Development (Cycle Time)
DP-Product Development (Cycle Time) HR-Training Time Per Employee
DP-Schedule/Cost Estimates (Accuracy)
LG-Cost
FA-Design Facilities (Cost) LG-Cycle Time
FA-Design Facilities (Cycle Time) LG-Headcount
FA-Facilities (Number) LG-Integration with Business Objectives
FA-Facilities (Size) LG-Perform Contract Administration (Headcount)
FA-Maintenance (Cost) LG-Results Achieved
FA-Plan & Obtain Facilities (Cost) LG-Volume
FA-Plan & Obtain Facilities (Cycle Time)
FA-Rent/Lease (Cost)

Managed Care Measures Pick List 23

MA-Customer Retention (Quality) **-Cost (Labor)
MA-Forecast (Accuracy) **-Cost (Overhead)
MA-Forecast (Cycle Time) **-Cost (Total)
MA-Headcount **-Profit Measure
MA-Marketing (Cost) **-Sales/Revenue/Market Share
MA-Marketing (Cycle Time) **-Stock Price/Net Worth
MA-Proposal (Cost) **-Total Headcount
MA-Proposal (Efficiency)
MA-Proposal Hit Rate (Efficiency)
MA-Prospect Qualification (Cycle Time)
MA-Prospect Qualification (Volume)
MA-Sales (Product)
MA-Sales Productivity (Efficiency)

MC-Contract Performance (Cost)

MC-Contract Performance (Cycle Time)
MC-HEDIS Measurements
MC-Medical Loss Ratio
MC-Medical Management (Nursing)
MC-Medical Management (Physicians)
MC-Medical Management (Specialty Programs)
MC-Provider Performance (Volume)
MC-Quality Improvement
MC-System Integration
MC-Treatment Protocols (Cost)

MN-Headcount
MN-Network Performance (Cost)
MN-Network Performance (Volume)
MN-Network/Provider Support (Cost)

PO-Equipment/Labor (Utilization)
PO-Headcount
PO-On-Time Delivery Rate
PO-Process Steps (Number)
PO-Purchase Discounts (Value)
PO-Purchase Order (Volume/Frequency)
PO-Purchase Price Variance (Value)
PO-Purchasing (Cost)
PO-Purchasing (Cycle Time)
PO-Supplier Defects (Volume/Frequency)
PO-Supplier Lead Time
PO-Suppliers (Number)

SY-Application Development (Cost)

SY-Application Development (Cycle Time)
SY-Headcount
SY-Labor (Utilization)
SY-Process Steps (Number)
SY-System Availability
SY-Systems Implementation (Cost)
SY-Systems Implementation (Cycle Time)

24 Managed Care Measures Pick List

Managed Care Measures Definitions
Arranged in alphabetical order by supra-process prefix.
Process Benefits/Claims (BC)
BC- Audit Claim Adjudication Process (Cost): The
expenses incurred to build and use safeguard
mechanisms in the claims and benefit processing
departments. This includes the personnel/
resource and technology costs associated with
claim review and loss prevention.
BC-Claim Payment (Accuracy): The absolute sum
of overpayments and underpayments minus the
total value of claim payment. The result is then
divided by the total value of claim payments.
BC-Claim Payment (Cost): The measure of costs
associated with generating a claim/benefit
payment to designated recipients as described
by policy provisions. Metrics include the cost of
personnel/resource and technology associated
with generating payments and accompanying
explanations/correspondences.
BC-Claim Payment (Cycle Time): The turnaround
time from receipt of a claim until the claim has
been paid, denied, or ‘pended’ for additional
information.
BC-Claim Payment (Volume): The number of
payments generated during a processing cycle.
Metrics include total payments, total payments
by policy, product, coverage, group, plan,
employer, or provider group.
BC-Headcount: The number of employees
responsible for the activities that comprise the
benefits and claims functions within the
organization. Metrics include the ratio of new
hires, layoffs, transfers to total department
employees over a specific period of time.
BC-Reinsurance Recoverable (Cost): The expenses
incurred to report eligible claim transactions and
request appropriate reimbursement from
reinsurers according to established agreements.
Metrics include the personnel/resource and
technology costs associated with information
gathering, claim/benefit reviews and report
generation for reinsurance notification.
Managed Care Measures Definitions
BC-Reinsurance Recoverable (Cycle Time): The
measure of time needed to report eligible claim/
benefit transactions to reinsurers for recovery
purposes. Metrics include the number of hours/
days necessary to gather claim/benefit
information, review detail against existing
agreements and generate recoverable report to
reinsurers.
BC-Settlement (Cost): The expenses incurred to
assess claim/benefit validity and determine loss
amounts for subsequent policy payment. Metrics
include the cost of personnel/resource and
technology in reaching loss settlements.
BC-Settlement (Cycle Time): The measure of time
needed to accept claim notifications, assess
validity and determine loss amounts for
subsequent policy payment. Metrics include the
number of hours/days required to gather all
appropriate documents for claim/benefit payment
determination.
Perform Business Improvement (BI)
BI-Benchmarking (Cost): The monetary expense of
conducting a benchmarking study. The three
types of benchmarking—strategic, process, and
statistical—and the four phases of
benchmarking—Needs Analysis, Gather
Information, Analysis, and Adapt & Improve—are
included in this grouping. Examples of metrics
are dollars to complete a customer service
benchmarking study, consulting fees to conduct
an account receivable benchmarking report, etc.
BI-Benchmarking (Cycle Time): The amount of time
required to conduct a benchmarking study. The
three types of benchmarking—strategic, process,
and statistical—and the four phases of
benchmarking—Needs Analysis, Gather
Information, Analysis, and Adapt & Improve—are
included in this grouping. Examples of metrics
are days to complete a customer service
benchmarking study, benchmarking analysis time
requirements, etc.
25
BI-CI Effort (Cost): The monetary expense of
conducting a Change Integration project. The four
phases of a CI project (Evaluate, Envision,
Empower, and Excel) are included in this
grouping. Implementation cost may include
administrative costs, labor expenses, and
investments in technology and/or information
systems. Examples of metrics are consulting
fees to complete the Envision phase, total dollars
to reengineer a business process, etc.
BI-CI Effort (Cycle Time): The amount of time to
conduct a Change Integration project. The four
phases of a CI project (Evaluate, Envision,
Empower, and Excel) are included in this
grouping. The time expended to implement
change is measured in calendar days as the time
from the initiation to completion of a project.
Examples of metrics are consulting time to
complete the Envision phase, total days to
reengineer a business process, etc.
BI-Layers of Management: The number of levels
within the organization from senior management
to front line worker. This includes the number of
levels before and after a reorganization initiative.
BI-Organizational Change (Cost Reduction): The
reduction in an organization’s cost structure as a
result of implementing change initiatives. Change
programs include Change Integration
implementation, reengineering, downsizing, and
the redesign of organizational structure.
BI-Organizational Change (Cycle Time): The
amount of time necessary to implement change
initiatives. This includes both projected and
actual time, as well as the time frames for
specific stages of the initiative.
BI-Organizational Change (Productivity):
Measurable improvements directly related to the
implementation of the change programs. The
areas of improvements include increased
revenues, improved morale, higher production
levels, and improved efficiency.
BI-Organizational Change (Staff Reduction): The
number of employees eliminated and/or the
number of positions eliminated as a result of
implementing change initiatives.
BI-Span of Control: The number of employees
reporting to a manager. This number includes the
number both before and after a reorganization
initiative.
26
Perform and Manage (CS)
Customer Service
CS-Customer Satisfaction Rating: A measure of a
company’s ability to fulfill customer expectations
and requirements. Customer Satisfaction is
related to perceived Quality of Care, but takes
into account the relative importance to the
customer of different aspects of the product and
service. A customer may be internal or external.
Examples of customer satisfaction metrics
include number of one-time resolutions, ratio of
complaint letters to praise letters, percentage of
repeat customers, etc.
CS-Customer Service (Cost): The total cost of
providing customer service, including fully loaded
costs for employees, supplies, equipment,
depreciation, as well as vendor expenses
incurred—i.e. inbound long distance telephone
carrier charges, etc.
CS-Equipment/Labor (Utilization): The ratio of total
time that customer service representatives and
equipment are fully functional and productive to
the total operational time available. Examples of
measurements are number of shifts worked,
average overtime hours per employee, ratio of
straight time to overtime, number of idle man-
hours, percentage equipment utilization,
percentage equipment downtime, etc.
CS-Headcount: The number of employees that
perform customer service functions. This
includes both permanent and temporary
employees. Examples of metrics are percentage
of employees hired in a year, number of layoffs,
change in employment base, number of
employees by department, etc.
CS-Inquiries/Complaints (Volume/Frequency): The
number of customer inquiries/complaints handled
by an organization. This includes visits, letters,
and member phone calls (inbound & outbound).
Examples of metrics are number of calls per
month, incoming calls per FTE, percentage of
complaints vs. total call volume.
CS-Invoice Customer (Cost): The monetary
expense incurred to create and deliver a
customer statement. Examples of metrics
include fully loaded cost per invoice, number of
invoices sent annually per billing Full Time
Equivalents (FTEs), etc.
Managed Care Measures Definitions
CS-Invoice Customer (Cycle Time): The amount of
time required to create and deliver a customer
statement. Examples of metrics include
processing time per invoice, average number of
days taken to deliver invoices to customers, etc.
CS-Measure Customer Satisfaction (Cost): A
measure of the expenses incurred to obtain
customer satisfaction information.
CS-Process Steps (Number): The number of
discrete tasks that make up a customer service
process. The number of process steps is most
often used to measure changes in process
complexity. Examples of metrics include number
of tasks per job function, number of document
pages, number of departments involved in a
process, number of approvals required, etc.
Develop Products (DP)
DP-Headcount: The number of employees that
perform product and service definition functions.
This includes both permanent and temporary
employees. Examples of metrics include
percentage of employees hired in a year, number
of layoffs, change in employment base, number
of employees by department, etc.
DP-Process Steps (Number): The number of
discrete tasks that make up a process for
defining products and services. The number of
process steps is most often used to measure
changes in process complexity. Examples of
metrics include number of tasks per job function,
number of document pages, number of
departments involved in a process, number of
approvals required, etc.
DP-Product Development (Cost): The monetary
expenses incurred for a new product/service to
complete all phases of development, from design
inception, actuarial analysis, regulatory approval,
to initial sale. Key milestones are design
conception, prototype modeling and design
approval, and rate filing. Examples of metrics
include cost to complete a draft design, total
dollars expended to develop a new product, etc.
Managed Care Measures Definitions
DP-Product Development (Cycle Time): The time
for a new product/service to complete all phases
of development, from design inception, actuarial
analysis, regulatory approval, to initial sale.
Product development time is sometimes
measured as time-to-market, which quantifies
how quickly (number of days) a new product is
ready to be sold. Key milestones are design
conception, prototype modeling and design
approval, and rate filing. Examples include days
to complete a draft design, total hours expended
to develop a new product, etc.
DP-Schedule/Cost Estimates (Accuracy): The
measurement of how close design estimates are
to actual time requirements and expenditures.
The accuracy of estimates may also be
measured as a variance (in dollars or days)
between expected and actual. Examples include
number of cost overruns, number of timeline
extensions, days over (or under) schedule,
percentage of actuals to budget, percentage of
cost to product revenue and/or prior development
costs, etc.
Manage Corporate (FA)
Services/Facilities
FA-Design Facilities (Cost): The monetary expense
incurred designing landscape, buildings, and
other structures. Example of measurements
include architectural fees, landscape design
costs, facility engineering costs, etc.
FA-Design Facilities (Cycle Time): The amount of
time required to design landscape, buildings, and
other structures. Examples of metrics include
average days to design a new retail building,
drafting hours required to modify an existing
building, etc.
FA-Facilities (Number): The physical locations
including buildings, land, and structures from
which an organization operates. Examples of
facilities are the number of administrative offices,
outpatient clinics, hospitals, warehouses, etc.
FA-Facilities (Size): The physical area or volume of
a building or facility. Key measurements include
total square footage of warehouse floor space,
area of office space, number of beds, etc.
27
FA-Maintenance (Cost): The monetary expense
incurred maintaining land, buildings, and other
structures. Examples include annual dollars
spent on landscaping, cost cleaning office space,
contractor fees, repair and maintenance expense
by department, etc.
FA-Plan & Obtain Facilities (Cost): The monetary
expense incurred in purchasing and developing
land, buildings, and other structures. Examples of
measurements include dollars spent on real
estate brokerage fees, costs of securing land
options, dollars spent on purchasing office
space, cost per square foot to expand warehouse
space, etc.
FA-Plan & Obtain Facilities (Cycle Time): The
average amount of time required to purchase or
develop land, buildings, and other structures.
Examples of metrics include time to expand
existing warehouse space, time to purchase new
office space, time to build a new store, time to
receive a capital expenditure approval, contractor
fees, etc.
FA-Rent/Lease (Cost): The monetary expense
incurred for the use of land, buildings, and other
structures not owned by the organization. This
grouping includes all leases for terms under 100
years. Examples of metrics include warehouse
rental expense, money spent on leasing, rent per
square foot, etc.
Manage Financials (FM)
FM-Manage Financials (Cost): The monetary
expense incurred in managing the organization’s
financials.
FM-Headcount: The number of employees needed to
manage assets and investments for the
organization. Metrics include the ratio of new
hires, layoffs, transfers to total department
employees over a specific period of time.
FM-Process Steps (Number): The number of
discrete tasks that make up a financial
management process. The number of process
steps is most often used to measure changes in
process complexity. Examples of metrics include
number of tasks per job function, number of
document pages, number of departments
involved in a process, number of approvals
required, etc.
28
FM-Accounts Payable (Amount Outstanding): The
amount of money an organization owes to its
suppliers. This category may include Days
Payables, Total Accounts Payable Due, Payables
Aging, and Payables Past Due, usually
expressed in days. Payables may also be
calculated by using actuarial calculations of
claim dollars incurred but not reported (IBNR).
Examples of metrics include days payable per
division, payables aging by supplier, etc.
FM-Accounts Payable (Cost): The monetary
expense incurred in processing invoices owed to
suppliers. Examples of metrics include A/P cost
per money paid, research expense per vendor,
total A/P salary expense, etc.
FM-Accounts Payable (Cycle Time): The average
number of days required to process a vendor
invoice, from receipt of a vendor invoice to the
time payment is made. Includes the time required
to match a vendor invoice to the purchase order
and the payment check. Examples of metrics
include time to generate a payment check, time
required to match invoice to purchase order, etc.
FM-Manage Treasury (Cost): The expenses incurred
to manage the company’s cash and cash
equivalents. Includes costs incurred to accept,
post and track payments which satisfy policy
obligations. Metrics include the personnel/
resource, technology and third party costs
associated with acknowledging premium/fee
collection. Included are applicable costs of bank
arrangements, and subsequent allocation
processes for payments, i.e. payment splits
according to contracted coverages.
FM-Debt/Liabilities (Value): The total value of an
organization's economic obligations. Examples of
metrics include total bank debt, salaries payable,
warranty obligations, etc.
FM-Equipment/Labor (Utilization): The amount of
time financial management workers and
equipment are operational as a percentage of the
total operational time available. Examples of
measurements are number of shifts worked,
average overtime hours per employee, ratio of
straight time to overtime, number of idle man-
hours, percent equipment utilization, percent
equipment downtime, etc.
Managed Care Measures Definitions
FM-Payroll/Expense Reimbursement (Cost): The
monetary expense incurred in processing
employee wages and expense reimbursement
payments. Includes printing checks, delivering
checks to employees, direct deposits processing
and costs of resolving payroll errors. Examples of
metrics include payroll expense per employee,
processing cost per time sheet, paycheck
printing cost, etc.
FM-Payroll/Expense Reimbursement (Cycle
Time): The period of time required to generate
employee wages and expense reimbursement
payments, from receipt of an employee time or
expense sheet to employee payment. Examples
of metrics include number of payroll errors per
employee, processing time per time sheet,
number of paychecks printed, percentage of
payroll direct deposited, average number of
paychecks per employee, etc.
FM-Reporting (Accuracy): The number of errors
identified in financial reports or transactions. May
also report the variance (in value) of financial
reports and statements to actual financial status.
Examples include number of invoice entry errors,
percentage of payable errors, number of general
ledger adjustments, etc.
FM-Reporting (Cost): The monetary expense
incurred in processing financial reports and
transactions. Examples of metrics include cost to
update the general ledger, cost of creating the
annual report, salary expense of the accounting
department, etc.
FM-Reporting (Cycle Time): The average amount of
time required to process financial transactions
and create financial reports. Examples of metrics
include time to update the general ledger, hours
spent developing the annual report, etc.
FM-Policy Valuation (Cost): The expenses incurred
to assess the amount at risk for a policy or policy
group at a specific point in time. Metrics include
the personnel/resource and technology costs
associated with detailed data analysis which
determine policy reserves.
FM-Policy Valuation (Time): The amount time
needed to assess the amount at risk for a policy
or policy group at a specific point in time. Metrics
include the number of hours necessary to review
policy cash amounts and conduct risk analysis
for determining policy reserves.
Managed Care Measures Definitions
FM-Portfolio Assets (Cost): The measure of
expenses necessary to determine the asset
value contained within individual portfolios.
Classifications include separate accounts, trust
accounts and departmental accounts. Metrics
include the personnel/resource and technology
costs associated with the summation of
individual trade valuations, trades that are the
components to defined portfolios.
FM-Portfolio Assets (Time): The measure of time
required to determine the asset value contained
within individual portfolios. Classifications include
separate accounts, trust accounts and
departmental accounts. Metrics include the
number of days required to determine asset
values within specific portfolios, accomplished
by the sum of component trade valuations.
Manage Human Resources (HR)
HR-Absenteeism: The average number of days for a
given time period that an employee misses work.
Examples of measurements are average number
of sick days per employee, attendance rate per
department, length of absence, etc.
HR-Compliance/Safety Violations (Volume/
Frequency): The level of adherence to laws,
regulations, industry standards, safety, and other
employment guidelines. This includes standards
of organizations such as the Occupational Safety
and Health Administration (OSHA) and the
National Institute of Occupational Safety and
Health (NIOSH). Measurements may be
expressed as number of violations, cost of fines,
length of time a company is in compliance, etc.
HR-Employee Grievances (Volume/Frequency):
The number of complaints submitted by
employees. This can include formal grievances
filed with labor unions, applications for workers
compensation, as well as informal letters of
complaint to supervisors or human resources
personnel. Examples of metrics include number
of workers compensation claims, number of
union grievances per year, number of sexual
harassment charges per employees, number of
discrimination lawsuits, percentage of grievances
resolved, etc.
29
HR-Employee Suggestions (Volume/Frequency):
The total number of employee ideas or
recommendations given to an organization in a
specific time period. Suggestions may relate to
quality, safety, cost, or other matters. Examples
of measurements include number of suggestions
filed, percentage of suggestions implemented,
etc.
HR-Employee Suggestions Implemented (Value):
The monetary value of saving directly and
indirectly derived from the implementation of
employee suggestions. Examples of metrics
include average saving per employee suggestion,
total rewards paid in employee suggestion
programs, etc.
HR-Employee Turnover: The percentage of
employees who voluntarily or involuntarily leave
an organization during a specific time period.
Retention measures the average time period that
an employee remains with an organization.
Metrics include employee turnover per
department and/or function, turnover current year
versus previous, average employee tenure,
number of open positions, etc.
HR-Headcount: The number of employees that
perform human resources functions, including
both permanent and temporary employees.
Examples of metrics include percentage of
employees hired in a year, number of layoffs,
change in employment base, number of
employees in the department, etc.
HR- Human Resources (Cost): The monetary
expense required to perform the Human
Resources function.
HR-Labor (Utilization): The amount of time human
resources workers and equipment are fully
functional and productive as a percent of the total
operational time available. Examples of
measurements are number of shifts worked,
average overtime hours per employee, ratio of
straight time to overtime, number of idle man-
hours, percent equipment utilization, percent
equipment downtime, etc.
HR-Process Steps (Number): The number of
discrete tasks that make up a human resources
process. The number of process steps is most
often used to measure changes in process
complexity. Examples of metrics include number
of tasks per job function, number of document
pages, number of departments involved in a
process, number of approvals required, etc.
30
HR-Training (Cost): The monetary expense incurred
delivering training. This can include both the
direct expenses of instructor time, class material,
and office space, as well as the indirect
opportunity costs of keeping workers from
performing their regular tasks. Examples of
metrics include average training cost per
employee, total training expense per year, etc.
HR-Training (Cycle Time): The average length of
time required to instruct employees, usually
expressed in days. Training time refers to
teaching methods, processes, or technologies to
both new and existing employees. Metrics
include total training hours per employees per
year, number of new course offerings, number of
credit hours required per year, time needed to
develop training program, etc.
HR-Training Cost Per Employee: The monetary
expense of education programs for each
employee. Training refers to teaching methods,
processes, or technologies to both new and
existing employees. Metrics include total training
value per employees, average cost of cross-
training per employee, etc.
HR-Training Development (Cost): The monetary
expense incurred developing training courses.
This can include both the direct expenses of
instructor time, class material, and office space,
as well as the opportunity costs of keeping
workers from performing their regular tasks.
HR-Training Development (Cycle Time): The
average length of time required to develop
employee education programs, usually expressed
in days. Training time refers to teaching methods,
processes, or technologies to both new and
existing employees. Metrics include total
development hours per employees, number of
new course offerings, time needed to develop
training program, etc.
HR-Training Time Per Employee: The average
length of continuing education each employee
receives, usually expressed in days. Training time
refers to teaching methods, processes, or
technologies to both new and existing
employees. Metrics include total training hours
per employee per year, average hours of cross-
training per employee, etc.
Managed Care Measures Definitions
Manage Legal Services (LG)
LG-Cost: The monetary expense incurred in
providing legal services. This encompasses
aggregate spending, inside and outside counsel
costs. Examples of performance metrics include
total legal spending as a percent of revenues or
assets, inside spending per attorney, fully loaded
hourly inside counsel rates, compensation as a
percent of total legal spending, total outside
counsel costs devoted to litigation.
LG-Cycle Time: The period of time required to
perform a legal function, service or process.
Performance metrics include the average number
of days to draft a complex contract, the total
number of days a matter remains active, and the
average length of time to respond to a routine
client inquiry.
LG-Headcount: The number of employees that
perform legal support services. Examples of
metrics include number of attorneys per dollar of
revenue, paralegals per attorney, total support
staff per attorney, secretaries per attorney, or
number of attorneys in specific areas (e.g.,
patent, environmental, human resources, tax).
LG-Perform Contract Administration (Headcount):
The number of employees responsible for the
activities that comprise the contract
administration functions within the organization.
This includes all company locations; corporate,
regional offices, field offices and operations
centers. Metrics include the ratio of new hires,
layoffs, transfers to total department employees
over a specific period of time.
LG-Integration with Business Objectives: The
extent to which attorneys are integrated into the
business operations. Performance metrics
include the percent of clients who believe
attorneys act as facilitators versus roadblocks,
and/or the percent of time attorneys are involved
in the initial client meetings.
LG-Results Achieved: Result oriented measures
related to the overall performance and
contribution of the legal function. Performance
metrics include settlement costs per thousand
dollars of revenue, and average time and/or cost
per case, degree to which favorable terms appear
in a documented deal of contract negotiation, and
results of client satisfaction surveys.
Managed Care Measures Definitions
LG-Volume: Quantity indicators associated with the
provision of legal services. Examples include the
number of active matters, number of new and
closed or resolved matters, the number of
outside counsel firms accounting for 75% of total
outside counsel fees, the number of chargeable
hours per attorney, the number of preventive law
seminars sponsored by the legal department, and
the number of complex deals handled internally.
Market & Sell (MA)
MA-Customer Retention (Quality): Average
customer turnover per time period. Intended to be
a measure of on-going customer satisfaction.
MA-Forecast (Accuracy): The measurement of how
close budget or forecast estimates are to actual
costs, revenues, or plans for a specific time
period. Budget/Forecast Accuracy may also be
expressed as a variance between actual and
allocated expenses. Example of metrics include
percent sales forecast accuracy, value over (or
under) budget, etc.
MA-Forecast (Cycle Time): The average amount of
time required to generate a sales forecast for a
specific business group. Examples of metrics
include days to develop a new market entry
campaign, or hours of market strategy planning
divided by sales, etc.
MA-Headcount: The number of employees that
perform marketing and sales functions, including
both permanent and temporary employees.
Examples of metrics are percentage of
employees hired in a year, number of layoffs,
change in employment base, number of
employees in the department, licensed agents/
brokers on a product basis, etc.
MA-Marketing (Cost): The monetary expense of
efforts to move goods and services from the
producer to the consumer. This may include
advertising, product planning, promotion,
publicity, research and development, and sales.
Examples of metrics include total radio
advertising expense, dollars spent on
promotional programs, etc.
MA-Marketing (Cycle Time): The average amount of
time needed to create and implement a marketing
plan for a target customer or market. Examples
of metrics include days to develop marketing
plan, average length of marketing campaigns,
etc.
31
MA-Proposal (Cost): A measure of the costs
incurred in preparing proposals. Includes cost of
labor and materials.
MA-Proposal (Efficiency): A measure of the
efficiency with which proposals are produced.
Metrics might include average time to complete a
proposal, from receipt of RFP through final
submission.
MA-Proposal Hit Rate (Efficiency): A measure of
the efficiency or effectiveness of proposal
efforts. Metrics include number of successful
proposals divided by total number submitted.
MA-Prospect Qualification (Cycle Time): The
amount of time required to receive a customer
inquiry/contact and conduct an office interview
and prepare product illustrations/descriptions.
Examples of metrics are customer qualification
time, average time from inquiry to illustration
walk-through, etc.
MA-Prospect Qualification (Volume): The amount
of customer inquiries or contacts pursued in a
specific time period, usually categorized by
product line or customer/market type . Examples
of metrics include number of customers
contacted, number of quotes provided, number of
illustrations generated, per month, year, etc.
MA-Sales (Product): The measure of product
revenue and expenses as percentages of total
product revenue and expenses.
MA-Sales Productivity (Efficiency): A measure of
total sales per sales person, employee, total
assets, etc. Intended to be a measure of the
effectiveness of sales efforts.
Manage Care (MC)
MC-Contract Performance (Cost): The expenses
incurred to deliver services to each contract/
policy. Metrics include the personnel/resource,
medical supplements (drugs, devices and
programs) and technology costs associated with
a contract/policy over a specific time period.
Metrics include service costs per contract month.
MC-Contract Performance (Cycle Time): The
measure of time needed to provide services to
each contract/policy. Metrics include the number
of days services are provided to eligible
members covered by a contract/policy, standard
reporting includes days of service per thousand
members over a specific time period.
32
MC-HEDIS Measurements: All specific
measurements which are a part of the Health
Plan Employer Data and Information Set (HEDIS)
performance reporting criteria.
MC-Medical Loss Ratio: Total medical expenses
incurred (usually hospital and physician fees or
capitation payments) as a percent of total
premiums billed. Does not usually contain SG&A
expenses.
MC-Medical Management (Nursing): Measurement
of the effectiveness of medical management
efforts. Metrics include number of RNs as % of
total nursing staff, presence of integrated case
management/utilization management of acute,
chronic, and catastrophic cases, use of
nationally recognized standards and criteria for
inpatient, outpatient, and ancillary services, and
others.
MC-Medical Management (Physicians):
Measurement of the effectiveness of medical
management efforts. Metrics include existence or
absence of full-time medical director, number of
MD Reviewers per 50,000 covered lives, clinical
practice guideline development, and others.
MC-Medical Management (Specialty Programs):
Measurement of the effectiveness of medical
management efforts involving specialty programs
such as prescription drug management, disease
management, diagnostic imaging, demand
management, mental health, and other specialty
programs.
MC-Provider Performance (Volume): The number
of successful service provider encounters. This
includes total visits by contracted members and
the number of complaints received or duplicate
visits needed for care. Provider comparisons may
be attained by statistical analysis of volume,
time and cost of encounters per illness, symptom
or disease state.
MC-Quality Improvement: Measurements of the
extent and effectiveness of quality improvement
processes. Metrics include presence or absence
of dedicated staff, existence of formal
documentation of processes and results, etc.
MC-System Integration: Measurements of the
degree to which a healthcare delivery system is
integrated across the various services that may
make up a complete patient encounter—from ER,
through inpatient, outpatient, and home health
care, for example.
MC-Treatment Protocols (Cost): The total monetary
expense incurred in developing and implementing
treatment protocols.
Managed Care Measures Definitions
Manage Providers/Networks (MN)
MN-Headcount: The number of employees
responsible for the activities that comprise the
management of provider networks. May be
subdivided by provider type, i.e. pharmacy,
physician, hospital, etc.Metrics include the ratio
of new hires, layoffs, transfers to total
department employees over a specific period of
time.
MN-Network Performance (Cost): The expenses
incurred to construct and use a network of
service providers. This includes personnel/
resource, technology and supplemental material
(drugs, devices and programs) costs that are
associated with the delivery of care and services
across the entire network. Metrics include dollar
amounts per provider location, per member per
month, geographic region and/or supplemental
service vendor, costs per outcome, encounter
and/or disease, etc.
MN-Network Performance (Volume): The number of
service encounters that take place over the entire
network of service providers, supporting all
covered membership. Metrics include the number
of encounters per provider, location, clinical
group, geographic area, etc.
MN-Network/Provider Support (Cost): The total
expenses incurred in providing support to an
individual provider or provider network. Includes
administrative functions, and the cost of network
communication materials.
Perform Procurement (PO)
PO-Equipment/Labor (Utilization): The amount of
time that purchasing workers and equipment are
fully functional and productive as a percent of the
total operational time available. Examples of
measurements are number of shifts worked,
average overtime hours per employee, ratio of
straight time to overtime, number of idle man-
hours, percent equipment utilization, percent
equipment downtime, etc.
PO-Headcount: The number of employees that
perform procurement functions, including both
permanent and temporary employees. Examples
of metrics are percentage of employees hired in a
year, number of layoffs, change in employment
base, number of employees in the department,
etc.
Managed Care Measures Definitions
PO-On-Time Delivery Rate: The ratio of orders
received on the promised date to total orders
placed. A delivery is usually considered on-time if
it is delivered on or before the agreed-upon
delivery date. Examples of metrics include
percentage of on-time deliveries, number of early
deliveries, etc.
PO-Process Steps (Number): The number of
discrete tasks that make up a purchasing
process. Examples of metrics include number of
tasks per job function, number of purchase order
pages, number of departments involved in a
process, number of approvals required, etc.
PO-Purchase Discounts (Value): The amount of
discount taken by an organization when
purchasing goods or services. This includes
volume, term, and trade discounts. Examples of
metrics are percentage of term discounts taken,
money saved from volume discounts, etc.
PO-Purchase Order (Volume/Frequency): The
amount of purchase orders created in a specific
time period, usually categorized by product line,
customer, or order type. A Purchase Order is
defined as a statement, either paper or
electronic, that permits a vendor to deliver goods
at an agreed-upon price. Examples of metrics
include number of orders per full time customer
service representative, orders received per year,
etc.
PO-Purchase Price Variance (Value): The difference
between the price paid to a supplier and the
standard cost of a product or service. Examples
include the purchase price variance for ‘Class A’
goods, purchase price variance by supplier, etc.
PO-Purchasing (Cost): The monetary expense
related to the acquisition of goods and services.
Examples of measurements are total purchasing
department expenses, value per blanket order,
average cost per requisition, etc.
PO-Purchasing (Cycle Time): The average time
require by a supplier to satisfy a purchase order.
Specifically, it is the time from order creation to
arrival of goods or services at the requested
location. It is usually measured in days (calendar
or business). Examples of metrics include
average order fulfillment time by location,
average order fulfillment time by vendor, etc.
PO-Supplier Defects (Volume/Frequency): The
level of quality provided by vendors. Quality can
be measured by the number of defects per million
items, internal supplier rating programs, number
of paperwork errors, etc.
33
PO-Supplier Lead Time: The time between placing
an order with a supplier and receiving goods or
services. The time includes supplier lead time
and receiving lead time, etc. Some commonly
used metrics are average supplier lead-time,
minimum rush order supplier lead-time, etc.
PO-Suppliers (Number): The total number of active
vendors. A vendor is usually considered active if
items have been purchased from the vendor in
the past twelve months. Metrics include the
number or percentage of suppliers that are owned
by minorities or women. This grouping also
includes changes in the supplier base such as:
percent decrease in number of suppliers, percent
change in supplier base, percentage change in
minority suppliers in the past year, etc.
Develop & Maintain (SY)
Systems/Technology
SY-Application Development (Cost): The monetary
expense of completing analysis, design,
construction, and implementation of a custom or
package computer application. Examples of
metrics are consulting fees to complete the
design phase, total cost to develop a custom
system, money to modify an off-the-shelf
software application, etc.
SY-Application Development (Cycle Time): The
amount of time spent to analyze, design,
construct and implement a custom or package
computer application. The time expended to
develop the system is measured in calendar
days as the time between the initiation and
completion of the project. Examples of metrics
are: consulting time, total employee days to
design a custom system, time to modify an off-
the-shelf system, etc.
SY-Headcount: The number of employees that
perform system development and maintenance
functions, including both permanent and
temporary employees. Examples of metrics are
percentage of employees hired in a year, number
of layoffs, change in employment base, number
of employees by department, etc.
SY-Labor (Utilization): The amount of time that
information systems workers and equipment are
fully functional and productive as a percent of the
total operational time available. Examples of
measurements are number of shifts worked,
average overtime hours per employee, ratio of
straight time to overtime, number of idle man-
hours, percent equipment utilization, percent
equipment downtime, etc.
34
SY-Process Steps (Number): The number of
discrete tasks that make up an information
systems process. The number of process steps
is most often used to measure changes in
process complexity. Examples of metrics include
number of tasks per job function, number of
document pages, number of departments
involved in a process, number of approvals
required, etc.
SY-System Availability: The amount of time the
computer system is idle, waiting for new user
requests. Included in this grouping is the amount
of time it takes the system to respond-to user
requests. Measurements include average CPU
(Central Processing Unit) utilization, average
system response time, etc.
SY-Systems Implementation (Cost): The monetary
expense incurred installing the hardware and
software of a new computer system or upgrading
an existing system. Implementation cost may
include administrative costs, labor expenses, and
investments in technology and/or information
systems. Examples of metrics are consulting
fees to implement a package software
application, cost of a new hardware platform, etc.
SY-Systems Implementation (Cycle Time): The
amount of time required to install the hardware
and software of a new computer system or
upgrade an existing system. The time expended
to implement change is measured in calendar
days as the time between the initiation and
completion of the project. Examples of metrics
are consulting time to implement a package
software application, total employee days to train
on a new system, etc.
** -Cost (Labor): The expenses derived from
employee wages and benefits. This includes
permanent and temporary employees, both full-
time and part-time. Measurements include
absolute expense of labor, ratio of labor
expenses to total revenues, etc.
** -Cost (Overhead): The expenses of supporting
business activities that are not directly
associated with the production of goods or
services. Examples include management and
administrative costs, utility expenses,
maintenance fees, human resources expenses,
etc. Measurements include absolute overhead
expenses, ratio of overhead expenses to total
revenues, etc.
Managed Care Measures Definitions
** -Cost (Total): The total expenses incurred by a
business in a specific area including direct,
indirect and overhead costs. It encompasses all
expenses of conducting business such as
operational, labor, and overhead costs. Metrics
include total operating expenses, total inventory
cost, etc.
** -Profit Measure: The net income (revenue less
expenses) of an organization. Some common
measurements of profit are Earnings Per Share,
Return on Equity, and Return on Assets.
Earnings Per Share is the amount of net income
divided by the number of common shares. Return
on Equity is the net income of a project as a
percent of the equity invested. Return on Assets
is the net income of a project as a percent of the
total amount invested (both equity and debt). (For
example, an entrepreneur opens a store with
$1,000 of her own money and a bank loan for
$9,000. If she makes $800 profit in her first year,
her ROE would be 80% ($800/$1000) and her
ROA would be 8% ( $800/ ($1000 + $9000). Both
ratios are used to evaluate the effectiveness of
capital investments based on the amount of profit
created. Examples of measurements are as
follows: earnings per share, preferred dividends
paid, total annual profit, annual return on equity,
return on asset by division, etc.
** -Sales/Revenue/Market Share: Sales is the total
cost or unit amount invoiced for products and/or
services. Revenue is the total gross income
realized during the course of business. Market
Share is the ratio of a company’s total sales
value or sales quantity to the total market (within
a geographical region or sales area). Examples
include total unit sales internationally, total value
sales domestically, percentage of youth market
in the Southeast, annual revenues, etc.
** -Stock Price/Net Worth: Stock Price is the market
value of a company at a specific point in time.
This can be determined by the value share prices
as traded on a stock exchange. Net Worth is the
value of an organization as computed by
subtracting total liabilities from total assets.
Examples of metrics include three month moving
average of stock price, annual growth in net
worth, etc.
** -Total Headcount: The total number of employees
in an organization/corporation.

Managed Care Measures Definitions 35

Managed Care Products/Services Pick List

Associations & Influencers

BCBS Plans
Group Model HMO
HMO (Health Maintenance Organization)
IDS (Integrated Delivery System)
Information Vendors
Insurers/Reinsurers
PBM (Pharmacy Benefit Manager)
PHO (Physician/Hospital Organizations)
Pharmaceutical Companies
Physician Practice Groups
Staff Model HMO
Technology Vendors
TPA (Third Party Administrator)

36 Managed Care Products/Services Pick List

Managed Care Products/Services Definitions
Associations & Influencers: Any of several groups
(or individuals) organized for the purpose of
influencing the direction and development of the
managed care industry.
BCBS Plans: Any healthcare organization having a
formal affiliation with the Blue Cross and Blue
Shield Association.
Group Model HMO: An HMO where the payor
contracts with independent groups of providers
for the provision of health care services.
Compare to Staff Model HMO.
HMO (Health Maintenance Organization): A health
plan that offers prepaid, comprehensive health
coverage for both hospital and physician
services. Members are required to use
participating providers and are enrolled for
specific periods of time.
IDS (Integrated Delivery System): A network of
organizations that provides or arranges to provide
a coordinated continuum of services to a defined
population and is willing to be held clinically and
fiscally accountable for the outcomes and the
health status of he population served.
Information Vendors: Any of several organizations
which publish information on the health care
industry. Does not include advertising.
Insurers/Reinsurers: The risk-bearing party in an
insurance contract. The insurer agrees to
indemnify the insured against claims made by
the enrolled membership during an agreed upon
period of time in exchange for the payment of
insurance premiums. Insurance companies, in
turn, enter into agreements with reinsurers to
protect them from unexpected losses.
PBM (Pharmacy Benefit Manager): These firms
administer the pharmacy portion of employee
benefit packages. They work directly for the
employer, or as a third party in a subcontractor
relationship with the organization(s) providing
major medical benefits to the employer. Typically,
these firms offer a variety of administrative &
cost containment services, including pharmacy
claims processing, mail service pharmacy, and
formulary management.
Managed Care Products/Services Definitions
PHO (Physician/Hospital Organizations):
Organizations created by the joint efforts of
hospitals and physicians. These organizations
are characterized by the alignment of incentives
and integration/consolidation of certain activities
related to care delivery. Numerous purposes are
served, including unified contracting with
managed care organizations, improved access to
capital and potential patients, and strengthened
competitive position.
Pharmaceutical Companies: Organizations that
have as their primary purpose the manufacture
and sale of pharmaceutical products.
Physician Practice Groups: Any of several forms of
physician groups, including Individual Practice
Associations, or IPA’s. Physicians organize into
such groups for purposes of increased bargaining
leverage with managed care organization and/or
hospitals, to achieve economies of scale for
administrative functions, and others.
Staff Model HMO: An HMO in which the staff
members are employees of the HMO. Compare to
Group Model HMO.
Technology Vendors: Vendors which specialize in
the manufacture, sale, and/or distribution of
hardware and software products and services to
the healthcare industry.
TPA (Third Party Administrator): An organization
that offers (non-risk bearing) administrative
services to the healthcare industry. Includes the
maintain, recording and adjudicating of member
claims on behalf of the insurer.
37
Industry Pick List
For each entry in KIT, the enterer is asked to classify the industry of the company that is being described in the
article, best practice, proposal, deliverable etc. For those entries that are concerned with topics and/or enablers
that transcend all industries, the industry field should be coded to Managed Care. This pick list roughly follows the
U.S. Census Bureau’s Standard Industrial Classification (SIC) coding system and should not be confused with
KnowledgeView’s strategic Industry Initiative views but be used in conjunction with these coding schemes to further
clarify the exact industry that is being detailed in a KIT entry, or to provide a way to group entries—that are not
included under one of the industry initiatives—by industry.

Managed Care Other (OT)

OT-Agriculture/Forestry/Fisheries
Financial Management (FM) OT-Construction
FM-Banking OT-Mining
FM-Broker/Dealers
FM-Capital Investments Retail/Wholesale (RW)
FM-Insurance RW-Retail (Apparel/Accessories)
FM-Investment Management RW-Retail (Food/Drug/Convenience)
FM-Real Estate RW-Retail (General Merchandise)
RW-Retail (Hard Goods)
Government (GO) RW-Retail (Non Store)
GO-Agency RW-Retail (Other Retail)
GO-Federal RW-Retail (Wholesale/Distributor)
GO-International
GO-State/Local Services (SR)
SR-Advertising
High-Tech (HT) SR-Consulting
HT-Communications/Technology SR-Education
HT-Computer Software SR-Engineering
HT-Environmental SR-Entertainment
HT-General SR-Food Service
HT-Life Sciences (Bio Technology) SR-Healthcare
HT-Semiconductors & Semiconductor Equipment SR-Hospitality
HT-Systems & Peripherals SR-Information Management/Systems
SR-Legal Services
Manufacturing (MN) SR-Marketing
MN-Electronics SR-Media
MN-Energy (Coal) SR-Personnel
MN-Energy (Petroleum) SR-Publishing
MN-Mfg (Aerospace) SR-Recreation
MN-Mfg (Apparel) SR-Services (Other)
MN-Mfg (Automotive/Transportation)
MN-Mfg (Chemical) Transportation/Communications (TC)
MN-Mfg (Consumer/Retail Goods) TC-Air Freight
MN-Mfg (Food/Beverage) TC-Airlines
MN-Mfg (Industrial/Capital Equipment) TC-Broadcasting
MN-Mfg (Metals) TC-Container Shipping
MN-Mfg (Other) TC-Motor Freight
MN-Mfg (Pharmaceutical/Biomedical) TC-Railroad Freight
MN-Mfg (Textile) TC-Telecommunications
TC-Transportation (Highway Passenger Transport)
TC-Utilities

38 Managed Care Industry Pick List