The Great Debate - PPO vs. HMO
August 14th, 2006 Insurance
Both HMOs and PPOs have benefits and downfalls. This will be dependent on what you are looking for and what kind of coverage that best suits your needs. Many people swear by one or the other and have no desire for the opposing insurance. But they are very similar in many cases and the things that make them different, are where the benefit or deficit lies for the individual.
A HMO is a collection of health professionals, doctors, hospitals, mental healthcare workers, and other specialists, who work for a set fee. There are independent HMOs in where all the staff members that work there work directly for that private HMO. A more broad spectrum of doctors and other health care workers can agree to a set fee for service with many different HMO plan companies and are not actually owned by the HMO itself. HMOs are designed to save people money while getting the entire healthcare they need. Co-pays for visits and prescriptions are usually very low and there is no deductible to be met. However, HMOs do have their downside. HMOs are in business to make money and so if you have many health care issues, you may not be accepted or have to pay more. If you have a chronic medical condition that requires many visits, tests, and treatment you will cost the HMO lots of money. They balance this out by keeping a tight hold on your health care. They must approve all visits prior to you going.
HMOs are usually extremely restrictive and have lots of rules that must be followed if you want them to pay. You can only see the doctors on your HMO list, and you must see your primary care doctor first, no matter what is wrong with you. If you have to go to the hospital you must have your primary doctor’s permission prior to going. Many people find that way too restricting and choose to not go with HMOs for that very reason. When and if you need to see specialist, you must have seen your doctor first to make sure they can’t treat you instead of going to a more expensive doctor. The HMO makes sure it is their doctor who has control over all your medical needs, not you. Most doctors are excellent and will hand out referrals and most doctors these days are enrolled in HMO plans so this isn’t a problem for many people. If you are not one of the lucky ones, getting the care you need could be difficult or non-existent. HMOs can also be a bit fussy about you wanting to change your primary doctor. So be sure that you like your doctor and you have spoken to other people who are patients of him or her.
Most HMOs also have a patient quota that the doctor has to comply with. He or she must see a set number of patients per day to avoid penalization or being removed from the group. This is why there is never enough time to talk with your doctor past your examination point. They need to keep it short so they can see more patients. There is also the concept of Capitation that gives contracted doctors a set amount of money for each patient each month. This is given no matter if the patient is sick or well. Lastly you must make sure any labs or tests you need are covered with your plan or they won’t be covered. But for most people who have HMOs this is not a problem and their doctors are great, so they don’t have any problems at all.