The Advantages & Disadvantages of PPOs Preferred Provider Organizations (PPO’s) are Managed Care Organization (MCO) that contract with a network of doctors, hospitals, and other health care providers. These doctors and hospitals, agree to provide health care to PPO members at lower rates, which allows the PPO’s to reduce overall health care costs. In other words, Preferred Provider Organizations offer discounts to visit health care providers, within their provider’s network. Two most important characteristics of PPOs are: The first important characteristic of PPO is that it allows its plan members to visit any doctor or hospital without referrals from the members' Primary Care Physicians (PCP). In other words, it is just opposite to another popular type of managed care plan, HMO (Health Maintenance Organization), which needs referrals from a PCP. Another appealing characteristic is the flexibility to visit or choose doctors and hospitals outside the network. But it also has some limitations—visits outside the network are not fully covered as visits within the network; thus require higher payments from patients. Despite of above mentioned facts, both these characteristics (no need to referrals and flexibility to choose outside the network) are very appealing to many employees. So, if you wish to avail any of these appealing characteristics, then it's worth your time to consider PPO as a part of your health benefit package. In sum, PPO’s are virtually having all the advantages of managed care health insurance and fee-for-service health insurance. The only disadvantage is that you must have to pay full rate for physicians and hospitals outside the network. So if you agree to pay for your choice, then PPO’s are the best option for you. Points To Be Considered: Checking and evaluating the network of doctors. When evaluating a PPO network, first inquire about the company's screening process, when signing up any physicians to its team. A screening process should ideally include background checks and analysis of any previous malpractice issues of the doctor. Ask how many of their network physicians/doctors are certified from the American Board of Medical Specialties. To be certified, the physician must demonstrate competency in a specialty by passing tests or meeting training requirements. Ideally, 85 percent or more of the physicians should be board certified, if they are not having these numbers then better to stay away from them. Another important point is to examine the policy carefully (don’t hesitate to ask as many questions as possible to clarify your doubts). Because there are many insider secrets; like the flexibility to choose any physician outside the network, often misguides plan members into a sense of false security. If the network is not up to the mark, people feel they can simply go outside the network for care. But in practice, many PPOs make it impractical to obtain care outside the network by setting high deductibles and co-insurance. So it’s better to check first. Advantages and Disadvantages: Despite the different approaches of managed care and fee-for-service, recent health care trends in California have shown a compromise between the two health care delivery systems in the form of preferred provider organizations (PPO's). In PPO's, patients enroll in pre-paid health care plans and still maintain freedom of choice in selecting health care providers. PPO's are able to integrate the main advantages of both managed care and fee-for-service health care delivery systems. The emergence of such innovation suggests that the health care system continually evolves to provide an adequate balance between the many goals that the health care industry tries to achieve. Let’s see some trade-offs of PPO’s: Advantages: PPO’s allow you to see any doctor or facility in their network without obtaining a referral. Additionally, out-of-network benefits allow you to see providers not in the network, but at a higher cost to you. This is important if you frequently travel outside of the provider area. The major advantage of a PPO is doctor-selection flexibility, which is not allowed in HMO’s. PPO’s networks are much larger that HMO’s networks You may choose specialists directly as you do not have to go through a Primary Care Physician (PCP). You can make your own healthcare decisions You may be admitted to any hospital or facility of your own choice. Disadvantages: You must pay full rate for physicians and hospitals outside the network If the network is not up to the mark, people feel they can simply go outside the network for care. But in practice, many PPOs make it impractical to obtain care outside the network by setting high deductibles and co-insurance. Some policies limit out-of-network coverage to specific health conditions, or set artificially low limits on the maximum payment. As with any health insurance policy, you should look for coverage with at least a $1 million maximum payout. © 2004 by Roger Lacocoa,  Affordable Health Insurance Quotes. ~~~~~~~~~ About the author: Roger Lacocoa is a professional consultant with Affordable Health Insurance Quotes, specializing in the areas of health, life and disability insurance. Disclaimer: All content in this website is provided for educational purposes only. The publishers of this website do not give any warranty as to the accuracy or completeness of the content on same website. No part of this website or any material appearing on the site may be reproduced, stored in or transmitted on any other website without written permission. All content is original and copyrighted.