Fixed Costs Costs which do not change with fluctuations in census or in utilization of services. For this fee the provider covers all of the services the client requires for a specific period of time. After the MCOs squeeze out costs by discounting fees, they often come to this method. If provider is still standing after discount blitz, this approach can be good for provider and clients, since it permits a lot of flexibility for provider in meeting client needs. Formulary A list of selected pharmaceuticals and their appropriate dosages felt to be the most useful and cost effective for patient care.
Organizations often develop a formulary under the aegis of a pharmacy and therapeutics committee.
In HMOs, physicians are often required to prescribe from the formulary.