Compariason of Hmo's and Ppo's

PPO- This plan contracts with physicians and facilities to perform services and a specified rate. Its to ensure that PPO members are charged less than nonmembers

Managed care dominates health care in the United States. It is any health care delivery system that combines the functions of health insurance and the actual delivery of care, where costs and utilization of services are controlled by methods such as gatekeeping, case management, and utilization review. Different types of managed care plans came into development by three major factors. These factors include choice of providers, different ways of arranging the delivery of services, and payment and risk sharing. Types of managed care organizations include Health Maintenance Organizations (HMOs) which consist of five common models that differ according to how the HMO is related to the participating physicians, Preferred Provider Organizations

Another type of managed care program that was introduced is the Preferred Provider Organization (PPO). A PPO is comprised of a group of physicians, hospitals and other medical service providers who contract with employers, insurance companies or other plan sponsors. The PPO offers discounted pricing to these contracted organizations due to the high volume of business received. PPO’s typically have up-front cost sharing in the form of deductibles and/or co-insurance, which vary depending upon the actual plan chosen.

Since the advent of health insurance in the 1950s, there have been many models of care that are come to the scene in an attempt to both control cost of care and improve quality of care. Insurance models came into being because the fee for service model used until then was proving to increase cost of healthcare without any measure of quality of services and care provided. Health insurance models have evolved from the basic hospital offered insurance to employer sponsored coverage plans. The US health system is broken both financially and quality wise with more than 20% of gross domestic product being spent on healthcare (Blackstone, 2016).

In this country there are numerous concerns about health care economics. Several factors contribute to the increase of health care costs. One area of concern is the impact of managed care on health care finances. Managed care has been around since the early 1970s. The definition of managed care is a set of contractual and management methods implemented to manage the financing and delivery of health care services. Initial implementation of managed care was for health care cost saving (Getzen & Moore, 2007, p. 203, para. 1). Though Managed care initially addressed several health care finance issues, there are still problems with the current

Managed care was born out of necessity. It involves plans, members, providers, and payments intertwined, one not working without the other. With managed care came rising health care costs. Utilization management and quality initiatives were introduced to help control these costs. Medicare and Medicaid were also helpful in setting standards of care which reimbursement is based on as well as providing access to health care for more people. Health care costs continue to rise but with passage of the Patient Protection and Affordable Care Act (ACA) the goal is more people will have access to affordable, quality health insurance while reducing the growth in our healthcare spending.

Insurance is separated into categories called Major Medical Plans, Qualified Health Plans, and Catastrophic Plans. Major medical plans consist of Health Maintenance Organization (HMO) plans: HMOs are one of the most popular types of health insurance you can purchase. With this plan, an entire network of health care providers agrees to offer you its services. You have to select a primary care provider (PCP) who coordinates all of your health services and care (Ehealth, 2014), Preferred Provider Organization (PPO) plans: Under a PPO plan, both you and your family can see any health care provider in their network, including specialists, without a referral. In most cases, you don’t have to

At one point, managed care was the viewed as a resourceful tool in efforts to help assist employee, physicians and hospitals with quality health care, while controlling the cost of medical care in the United States. Over the past 30 years, managed care has been in the limelight of health insurance, as a dictator of how it will pay for medical bills. There have been many factors playing a role with managed care over the years. For example, due to the slim selection of options that are available with physicians in rural areas, and limited physicians to choose from, does this compromise the quality of care of each member or does this cut off services for members

“Managed care embodies an effort by employers, the insurance industry, and some elements of the medical profession to establish priorities and decide who gets what from the health care system.” (JAMA.2001; pg. 285:2622-2628). Manage Care is part of the Health Care system since 1973 is known as the system that finances and delivers health care to individuals enrolled under their plans. Manage care is intended to reduce the unnecessary health care cost in America through a variety of mechanism that includes medical necessity review programs, economic incentives for physicians, beneficiary cost sharing, control of

A preferred provider organization (PPO) plan gives patients the flexibility to see providers and specialists within or outside the network of care; it will typically cost less to receive care from an in-network provider (U.S. Centers for Medicare & Medicaid Services, n.d.). In most cases, referrals for specialists and designating one physician as a primary care provider is not required of a PPO plan. (U.S. Centers for Medicare & Medicaid Services, n.d.). Alternatively, a health maintenance organization (HMO) limits patients to receive care from doctors, specialists, and hospitals covered under the health plan (U.S. Centers for Medicare & Medicaid Services, n.d.). With the exception of emergency can and out-of-area urgent care, all care providers

The PPO gives discounts, with its doctors and hospitals that participation, and then pays a fee for services given. Patients have a list that they can pick from for a primary physician. The patient pays a set fee per office visit and the insurance provider pays the rest. It’s basically a co-payment which depends on what type of plan they have. However, like an HMO, the PPO has to choose a physician in that network, if they don’t they may be charged a penalty.

Preferred Provider Organization PPO – Member are not required to have a PCP, and usually don’t need a referral to see a specialist. Is less restricted than the HMOs. They can receive care from in or out of network providers. PPOs offer an incentive to obtain care from in-network providers by paying a higher percentage of costs.

HMO (Health Management Organization) is a preferred provider organization. Their focus is to reduce the cost of the preventative care as well as implementing utilization management controls as part of their goal. Being part of a HMO, you can choose the primary physician for medical purposes. One of the advantages are the low cost out of pocket costs for the patient’s insurance. Each time you seek medical care you are only obligated to pay a percentage of the bill. Members of HMO are at a fixed cost for the monthly fees. HMO tries to encourage the patients to stay on top of their health, and not let their illnesses get to out of hand by letting it get worse. Another advantage, is that being part of the HMO, your offered education classes and discounted club memberships for your health. The disadvantages of the HMO consist of some strict controls. An example of an advantage would be if you decided you wanted to receive care from another doctor or specialist, it must be consulted. Although by doing the consultation, which helps lower the cost for the HMO and the member, it can also cause problems if your physician doesn’t provide you with the referral. When you receive care from a provider that’s not part of a HMO, the organization will not pay for services that are non-emergency from the physician. (Medical Billing, n.d.)

Managed care was established in order to manage health care cost, utilization, and quality (Kongstvedt, 2015). In managed care, health insurance is provided through HMO, PPO, and other types of managed care. It has the potential to reduced health care spending and improved the quality of care. However, despite of its success in improving the quality of care through preventive health care services, chronic disease management program, and so forth, many physicians are reluctant to be part of the managed care environment. Some of the reasons are the impact of managed care to physician’s income and autonomy. Under managed care, insurers have decreased the fees paid to physicians. There are different ways how managed care organizations control costs. One of this is through selective contracting with health care providers and hospitals to lower costs. In selective contracting, health care providers agreed to accept lower prices in exchanged for guaranteed volume of patients under managed care plan (Culyer, 2014). This paper will discuss more issues and trends in Managed Care Organizations such as the rise of Medicaid Managed Care spending, the new Medicaid Managed care Rule, and the collaboration of Managed Care Organizations and Accountable Care Organizations to reduce health care spending and improve efficiency of care.

Health Maintenance Organization (HMO): Medical or Doctors that work through a contract in HMO, the exception is emergencies. Point of Service (POS): One would pay less if using providers within the network. Preferred Provider Organization (PPO): Use the physicians outside of the plan. This plan is higher pay than HMOs.