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2-3 pagesWeek 4 Project




Before beginning work on this assignment, please review the expanded grading rubric for specific instructions relating to content and formatting.

Part I

Consider the four health plans below with an eye to choosing one to offer to the company’s employees. Assume that the health plans and their annual per employee premiums are as follows:

Health Plan

Premium, Individual

Premium, Family

Aetna Health












The employer will pay 80% of the premium for individual coverage, and the employee will pay the remaining 20% as well as the entire additional premium for family coverage. (The premiums listed above, while realistic in magnitude, are hypothetical and computed solely for the purpose of this project.) All of the plans are managed care plans. Assume that the benefit package is the same across all plans, so there is no difference between them in what services are covered.
In addition to the above data, click here to access the latest report for ‘Health Plan Comparison in New York State’. Review the online report and incorporate relevant information into your evaluation.
You can view the various categories of measures on which health plans are rated (e.g., Access to Care, Adult Living with Illness, etc.). Click each link for a summary chart that presents the performance (usually as a percentage score) of each plan in the group on the relevant measures and how each plan compares to regional and statewide scores.
Provide an analysis that outlines the plan you selected and why. Generally, you would select the plan with the highest score, but if you chose a plan with a lower score, explain why. Include the following elements in your analysis:
· Explain which factors (e.g., price and/or performance measures) were most important to your choice of plan and how you derived the weights for each factor you used.
· Indicate, on a scale of 1 to 10, how comfortable or confident you are that you made the right choice, with 10 being most confident.

Part II

You need to use the multi-attribute utility (MAU) technique to respond to the following questions. Although the technique can be performed with pencil and paper, it is recommended you use a Microsoft Excel to do the various calculations involved.
Click the following links to access the information on using the MAU technique:
· MAU Model- Attached
· MAU Example- Atttached
· Compare your level of confidence at the time you completed Part I to your confidence level for Part II, when you used this decision aid.
· Was it helpful? What were its advantages and disadvantages?
Did it make the decision harder to make or easier to justify?


Hahn, W.J., Seaman, S.L., & Bikel, R. (2012). Making decisions with multiple attributes. Retrieved from http://gbr.pepperdine.edu/2012/08/making-decisions-with-multiple-attributes-a-case-in-sustaSheet1

HCM3002 Economics of Healthcare

Choose a Health Plan (Part 2)

Example of using the MAU model for choosing an office site

Criteria Weights Sites

Raw Sum to 100 Site A Site B Site C Site D

Cost per square foot 40 28 0 70 100 50

Located where service is needed 30 21 50 30 0 100

Accessible by public transportation 30 21 100 80 80 0

Handicap accessibility 20 14 100 70 60 0

Room for expansion 10 7 30 100 0 30

Close to medical center 15 10 100 0 80 80

Totals 145 100 57.24 195.00 176.00 114.00

This is an example of using the MAU model for choosing among several sites for a medical office, considering such factors or criteria as rent, location, and space. Both raw weights and normalized weights are given. Normalized weights sum to 100. All the calculations are done by formula. When you place the curser in a cell, you will see the formula in the Formula Bar.


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HCM3002 Economics of Healthcare

© 2013 South University

Multiattribute Utility (MAU) Model

Some decisions are complex, and using a decision aid is often helpful. Described here is one

such aid, which involves creating a multiattribute utility model or MAU model. Despite its

somewhat scary name, the process of building such a model is not a difficult one, and it can help

a decision maker structure a problem or decision. Once the alternatives have been identified, the

process involves determining the appropriate criteria (i.e., the attributes which give the model its

name) on which to judge the alternatives, how important these criteria are in relation to each

other, and how well the alternatives stack up against these criteria. The model then brings all this

information together into a single score (that measures the overall utility of each alternative) so

that the decision maker can make appropriate recommendations. In this way, using the model can

either aid in making an initial decision or reinforce a decision that has already made.

Building the model and making the appropriate calculations can be done with pencil, paper, and

calculator. However, it is recommended that you construct a spreadsheet to organize your input and

perform the requisite calculations. Read through these instructions completely before proceeding so

that you will have a better idea about how to set up your worksheet. The process follows these five


Step 1: Define the alternatives and the attributes or criteria on which you choose to evaluate

the alternatives.

For this project, the alternatives are the various health insurance plans that you can contract with.

As you are dealing with a relatively small number of plans, all of which serve the geographic area

in which you are located, you can evaluate all of them unless you have a reason to eliminate one

or more of the plans from consideration. (If this is the case, include in your write-up which plan(s)

and why.) Regarding the attributes or criteria, you will need to choose a subset of the performance

indicators or measures presented in the report card as it would be too difficult and time-consuming

to include the full set of items in your model. Choose 6-8 items included in the report, perhaps

creating a set of items from across the major performance categories (e.g., Women’s Health,

Access and Service, etc.) rather than choosing all your criteria from one performance category. If

the amount of the premium is important, include that as well. (Hint: It will make your task easier if

you choose indicators on which all or most of the plans have been scored. However, if an indicator

is important to you and a particular plan has not been scored on that indicator, you may choose to

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HCM3002 Economics of Healthcare

© 2013 South University

keep the indicator and impute some value for that plan’s performance. If you do so,

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