Week Six Discussion Question 1

Three common models of managed health care organizations are:

Health Maintenance Organization (HMO’s) have partnering providers that are credentialed to participate in the HMO’s network. Within an HMO the Primary Care Physician (PCP) is the coordinator of the patient’s care. Patient’s must-see their PCP first and then adjunct providers or specialist can be added to the care team via a referral from the PCP. HMOs, require the PCP to coordinate care/services with in-network specialist and providers (Pozgar, 2012).

Preferred provider organization (PPO) PPO is made up of a network of medical providers and specialist. However, in a PPO agreement, the patient has an option to see any provider they choose. Choosing an in-network provider would be more cost efficient for the patient but the PPO does allow more freedom and flexibility for the patient to go outside the network to seek care without fear of claims being denied.

Point of Service (POS) has characteristics of a both an HMO and PPO combined. POS plans have low copays, added options and liberties for patients to choose their PCP. However, POS plans do prefer that patients choose a PCP to provide all referrals for visits to specialists within the POS network. POS plans do allow patients to go out-of-network to doctors and specialist but there are substantially higher deductibles and copays for doing so (Pozgar, 2012).

Identify the pros and cons of each chosen model.

A few pros of being a part of an HMO’s are they provide significant cost savings to the patient in the form of lower deductibles, cheaper co-pays and decreased out of pocket maximums for patients. HMO’s embrace annual PCP visits and preventative care management.  Most HMO’s incentivize their member’s with disease management or tele-coaching programs and also promote wellness via free gym memberships (Pozgar, 2012).

HMO cons are limited freedom and flexibility in seeing providers outside the network, extreme costs such as large copays and deductibles or denied claims if patients utilize a provider outside the HMO network. Lastly, inadequate provider networks can delay appointments and care or cause increased travel time due to far distances to see an in-network specialist (Mena Report, 2014).

  PPO pros are freedom of choice and the flexibility of the plan.  Some patients enjoy the advantage of not needing a referral or authorization before they can seek care. PPO’s usually have larger participating networks of providers and patients have more providers to choose from. This option helps with appointment scheduling and patient level of satisfaction (Mena Report, 2014).

 Cons to PPO are higher out of pocket cost, larger co-pays and higher deductibles to meet. These costs can almost double when seeing out of providers not associated with the PPO network.  

POS pros you can mix and match your providers an example of this would be a patient can have an in-network PCP and an out of network Gynecologist. Patients can see both in network and out of network providers (Wojcik, 2014)

POS cons patients do have the freedom to venture outside of the network, but they’ll have to pay the majority of the cost for care when they do so, this can lead to substantial copayments and deductible unless the primary care provider has made a referral to the out-of-network provider (Wojcik, 2014).

Suggestions to strengthen the weaknesses of each of the previously reviewed models

HMO’s could strengthen their model if they adopted some flexibility as it relates to providers and specialist. HMO’s should consider their membership and network adequacy and allow patients to go out of network 2-3 times per year as needed and not penalize the member. This should be based on the chronicity of the patient’s condition and ability to get timely treatment in the network.

PPO’s  could strengthen their model by offering healthy living incentives to patients that would apply to their deductible or copay and example of this would be if a patient smokes cigarettes and participates in a smoking cessation program they get $250 towards their deductible or if they participate in a tele-coaching or disease management program there is an incentive towards their deductible or a rebate check at the end of the year.

POS could strengthen their model also by similarly offering incentives and discounts to help patients meet those high-cost deductibles or copays when using out of network providers or allowing a  1-2 case by case basis reprieve if it promotes continuity of care and still saves the organization costs and prevents hospitalizations.

 References:

Mena Report. (2014). Managed Care Payment Audits of Zero Balance Accounts. 

Pozgar, G. (2012). Legal aspects of health care administration (12th ed.). Sudbury, MA: Jones and Bartlett Learning.

Wojcik, J. (2014). HMOs, PPOs REPLACED BY HIGH-DEDUCTIBLE PLANS; More companies consider moving to single offering for health care benefits. Business Insurance, (10)