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Essay / Research Paper Abstract
This paper is a case study about OmniCare, a health maintenance organization that ran up billions of dollars worth of debt and that was seized by the state of Michigan, where it is located. The paper focuses on the history of the company, as well as what might have led to its problems. Bibliography lists 5 sources.
Page Count:
5 pages (~225 words per page)
File: D0_MTomncar.rtf
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Unformatted sample text from the term paper:
health and well-being. For OmniCare in Michigan, however, complaints didnt come from patients so much as they came from health care professionals and other vendors who saw patients under this
particular plan. Because OmniCare has been in financial trouble for so long, the HMO had not been paying its obligations. As a result, the state of Michigan, in mid-2001, was
forced to take control of the non-profit HMO and come up with a rehabilitation plan so that the creditors would receive their money.
Being under state control was nothing new for OmniCare - the health maintenance organization (HMO) had been under a limited form of state control since 1998 for underreporting financial
obligations, failing to pay bills on time, failing to file a certified annual statement and insolvency (Webster, 2002). Although the HMO had been trying to correct its problems, insufficient funding
and increasing medical expenses took their toll (Webster, 2002). Because bills werent being paid to doctors in a timely fashion, they were
losing money (Webster, 2002). Michigan state law requires HMOs to have a minimum net worth of $1.5 million, but OmniCares 2000 year-end
statement reported a negative worth of $8 million (Webster, 2002). For awhile, it appeared as though the Detroit Medical Center might purchase
the ailing HMO (Taylor (b), 2001), but concerns about the financial condition of the health system had killed the deal (Webster, 2002). Basically, DMC dropped out of the purchase when
the company learned that OmniCare owed millions of dollars more than previously thought to health care systems, vendors and partners (Taylor (b), 2001). During negotiations, DMC agreed to write down
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