Question

Assume the role of a consultant advising a benefits manager for a local telecommunications organization. The company is self-funded and has 25,000 employees, dependents, and retirees eligible for health benefits. The employees are currently enrolled in a managed PPO plan administered by a commercial insurer. The employer’s health plan costs have increased by 15% over the prior year. Therefore, leaders are considering more cost effective options.

Identify at least three (3) managed care options that the organization would consider to be cost effective. Next, compare the three (3) options and make a recommendation based on your comparisons.

Answer 1

The three main types of Manage Care are Health Maintenance Organization (HMO), Preferred Provider Organization (PPO), and Point of Service (POS) insurance plans. In HMO the employees are given a list of health care provider and hospitals they can use for there medical needs at a discounted rate. They need to pay a monthly fee at a fixed rate regardless of how much care they received. Individuals are also guaranteed unlimited treatment and benefits for the lifetime of their membership in the plan. PPO is the same as HMO preferred provider organization provides discounted health services to its members, but the difference is members have the option to choose their own physician rather than being limited to a list of providers. Unlike HMOs, users of PPOs are required to pay for services at the time rather than on a prepaid, fixed-rate basis and are reimbursed at a later date. Since the cost is arranged by the sponsor and healthcare provider ahead of time, patients are able to know what they will be expected to pay. These costs are typically covered at specific price points for individuals and families. This also means patients have to look after their own paperwork. POS have a characteristic of both HMO and PPO members can choose which option they want to use at the time of service. When patients set out of the network they will have to pay most of the cost, unless the primary care provider has made a referral to the out-of-network provider. In my opinion PPO is still the most cost effective manage care because it is a more restrictive form of managed care. Employees will be more careful on using there insurance because of the co-payment system unlike HMO which have a fixed monthly rate no matter how much treatment the employee received this may give the employee a chance to misuse there manage care plan.