Essay about Compariason of Hmo's and Ppo's

1227 Words Sep 7th, 2012 5 Pages
Comparison of HMO’s and PPO’s

May 9, 2011

Dr. Rhonda Hatfield

MHA 628

Health care cost has risen dramatically in the last decade. Health care plans have been forced to look at the quality of health care given by the providers so they can implement certain strategies to help reduce heath care costs. Managed Care describes a group of strategies that is looking to reducing the costs of health care for health insurance companies. (Kongstvedt 2007)

Through the use of managed care, HMOs and PPOs are able to reduce the costs of hospitals and physicians. Managed care is a set of incentives and disincentives for physicians to limit what the HMOs and PPOs consider
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Through the use of managed care, HMOs and PPOs are able to reduce the costs of hospitals and physicians. Managed care is a set of incentives and disincentives for physicians to limit what the HMOs and PPOs consider unnecessary tests and procedures. Managed care generally requires the consent of a primary-care physician before a patient can see a specialist. (www.amjc.com)

An HMO provides comprehensive health-care services to the insured for a fixed periodic and or an nominal fee for the provider. HMO’s can have a variety of relationships with the hospitals and physicians. For example, the plan physicians may be salaried employees, members of an independent multi-specialty group, part of a network of independent multiple

specialty groups or a member of a individual practice specialty group. (Kongsvedt 2007)

Because HMOs integrate health-care providers with insurance, they are able to provide improved health-care delivery. This unique relationship often allows HMOs to maintain a lower cost of service from plan providers. Because the HMO is both a provider and an insurer, this allows for lower administrative cost to the patient. Preventive care is offered through HMO’s, this is a way they try to reduce cost, through early detection and wellness programs. Thus, inexpensive visits to the primary care physician the chance for early detection of costly diseases can be

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