Patent ID: 7765117

Claim:
A method of managing the risks of healthcare related costs comprising the steps of: predicting, via a processor, healthcare related expenses for at least one supplier of healthcare services for a predetermined future period of time; correlating, via said processor, a healthcare related data source with historical healthcare industry revenue data and healthcare industry cost data; creating, via said processor, a healthcare index for tracking a fluctuation of healthcare related costs based on said healthcare related data source; creating by said at least one supplier, via said processor, a hedge ratio, wherein said hedge ratio utilizes a price of an existing futures contract based on said healthcare index; utilizing, via said processor, said hedge ratio to determine a quantity of a derivative instrument to purchase; wherein said derivative instrument utilizes said healthcare index as a price source; purchasing by said at least one supplier, via said processor over an Exchange, said quantity of said derivative instrument; and selling by said at least one buyer of healthcare services, via said processor over said Exchange, said quantity of said derivative instrument.