If you’re an employee who currently has health benefits through your employer, you likely have a plan through a traditional broker with a Preferred Provider Organization or PPO. Think about your health insurance for a minute. Are you satisfied with your coverage, costs, quality of service from your broker and freedoms in what medical providers you can see?
If you answered “no” to any of those factors, you may be experiencing disillusionment with this style of health insurance. Thankfully, other options do exist–like a direct relationship between you, your health insurance, your employer and your medical providers. We at ClearChain Health are strong proponents of this transparent management of the healthcare system. Here are five key reasons to eliminate the outdated PPO model and switch to a more transparent alternative.
Reason #1: High Costs for Members
PPO models function as a network of broker-approved medical providers who accept their members’ insurance. In theory, this should make finding a medical provider simple for members of a PPO plan. However, the way brokers and medical providers reach an agreement for their inclusion in the network is through a negotiated contract on the back end. This need to constantly negotiate contracts not only distracts brokers from focusing fully on members but also leads to operating costs that are passed along to members in their insurance expenses.
This model can also lead to high out-of-network penalties and fees. If a PPO member decides to see a doctor outside of their network, they must pay more out-of-pocket in both contributions and penalty expenses.
Reason #2: Too Much Restriction
The network of a PPO plan does make choosing a medical provider convenient for members who don’t have any specialized health needs or much time to look for a medical provider. But for members who have more intensive or unique health needs, they may run into problems in terms of who they need and want to see. Say a member requires a knee replacement and wants to go to a certain surgeon recommended and trusted by friends and family. If this medical provider isn’t in their network, they either have to pay significantly out-of-pocket or settle for another provider they don’t want to see.
Reason #3: Overcharging, Fraud and False Loyalties
As previously mentioned, traditional brokers offering PPO plans are often too busy managing their provider network and corresponding contracts to pay as close attention to their member groups as needed. Most unfortunate in this neglect is auditing claims before members see them.
While medical providers are often very fair in their treatment costs and required payments, hospital billing departments often overcharge patients for service by unbundling CPT codes. This means that, instead of using the standardized price code for a medical procedure, the hospital will individually charge for all pieces and parts that make up said treatment. Unless a patient’s health insurance broker is reviewing claims and catching any mistakes in the charges, these incorrect and fraudulent charges will be passed on to them.
Reason #4: Lack of Price Transparency
PPO models do not prioritize price transparency for members–they prioritize making money through the management of their network. This means that members are kept in the dark about what goes on with their money once they contribute to their health insurance. They have no idea where their money is going, why their costs are so high or why the medical professional they wanted to see is out of network. This is intentional, as PPO brokers do not want their members to see how much of their insurance costs actually go towards network maintenance and paying themselves. When employees experience frustration and anger with their employer over rising benefit costs, it could very well be their employer is just as helpless–the traditional broker is merely trying to cover their own costs.
Reason #5: Lack of Options and Plan Flexibility
A large, traditional broker doesn’t have the time to customize a plan for each of its member groups, outside of a few small modifications. A smaller company with younger employees without many health conditions likely has very different health insurance coverage needs than a large company comprised mostly of parents with young children dependent on them for coverage. However, with a traditional broker, these companies may be getting minor variations on the same plan–leading to overpaying for employees without significant coverage needs and too little coverage for families with multiple children.
Looking for a Broker Beyond the PPO Model?
At ClearChain Health, we believe in a direct relationship between you, your health insurance and your medical provider. This provides total transparency in your billing, lowers your out-of-pocket costs and eliminates the outdated, restrictive PPO network model. Learn more about our model and contact us today!