“Preferred Provider Organization (PPO) A type of health plan that contracts with medical providers, such as hospitals and doctors, to create a network of participating providers. You pay less if you use providers that belong to the plan’s network.”
Oh really. The BUCA (Blue Cross, United, Cigna, Aetna) payers reimburse out of network hospitals at about 125% of Medicare while clearly reimbursing In-Network hospitals closer to 300% of Medicare on average. Most hospitals now have cash-pay initiatives at a rate of about 135% of Medicare, and Reference Based Reimbursement pays at average levels just above 150% of Medicare.
So, if you desire to pay more for healthcare services, the PPO model is your best option. The PPOs will charge you an access fee of $12 to $20 to have that option too. One last thing, since employers sign the inane PPO agreements they are legally bound to pay the excessive provider fees by contract. No wonder your healthcare expenses are so high.
When we have a situation, as we do in healthcare, where the networks have cornered the market and control the pipeline of patients, along with the magnitude & directional flow of money in the system, that which follows is a de facto CARTEL of very unequal participants; one where the disconnect between the ability of the supply side and demand side to send meaningful price signals to each other is necessarily suppressed by the financial design of the network payment/reimbursement mechanism.
What characterizes the network as a consumer/buyer benefactor by way of “negotiated discounts” for services rendered, in reality ends up suppressing the only forces (price signals) which are capable of determing value and controlling prices. All this being to the detriment of end users and/or first order buyers of healthcare resources.
Since PPOs make their revenues off access fees with absolutely no responsibility to screen claims for accuracy and since their market value is directly tied to the number of physicians and facilities they have inside their networks, employers and their administrative payers’ demands for transparency have gone unmet over the last decade. This has led to the significant movement to eliminate PPO arrangements altogether as they not only provide no real value to the healthcare equation but in many cases promote a negative value. This is the efficient market theory at work, all elements within a market that do not add value to the overall market will eventually be eliminated.
Welcome to Concierge Medicine Today | Est. 2007 | High-Touch, Concierge Medicine & Precision Medicine News | (770) 455-1650 | email@example.com | This site does not constitute medical advice. | Educational, News and Information Trade Publication
Independent Online News Organization. Our Editorial Mission is to Cover the Direct Primary Care Economic Ecosystem & Employer-Centric DPC Programs Spurred by the Advent of Subscription-Based Healthcare Delivery Models | firstname.lastname@example.org