To: Bruce Rozenblit who wrote (2624 ) 7/19/1998 12:34:00 PM From: Brian Moloney Read Replies (1) | Respond to
Let me change your focus slightly.The problem is managed care in toto, not merely HMOs. There are few communities where the majority of the insurance is HMO. Most of the managed care in my state (Indiana) and most others is PPO and the ultimate managed care organization, Medicare. PPO stands for preferred provider organization. Unlike HMOs which pay us on a capitated basis, the PPOs pay on a discounted fee-for-service basis. HMOs are often not as strict about certain tests because the doctors share in the financial risk. If we order too many tests, we make less money, so we are more likely to "police" ourselves (the risk here is under-utilization). With PPOs, the doctors are not at risk, so the organization tends to make strict clinical guidelines to control costs. In other words, they refuse to pay at all for certain tests (or meds) and make us jump through a lot of hoops to try to get other tests approved (the thinking being that a busy doctor won't be willing to jump through too many hoops). Patients then have to pay out-of-pocket because they are having to do something out-of-plan.
