What is a PPO Health Plan?
A preferred provider organization (PPO) is part of managed care. It is a network made up of nurses, doctors and others in the healthcare field. The care that patients get under a PPO is generally believed to be the same as the care they would get elsewhere. There is a difference in cost, however, as medical professionals in a PPO have an agreement with the managing company or network.
They agree to accept specific amounts for their services and if the services cost more than that, they will absorb those costs and not pass them along to their patients. In return for that agreement to accept specific fees and rates for their services, they see an increase in their patient base by being part of the network.
PPOs are subscription based, meaning that patients who are part of the network pay premiums each month and generally also have a copayment for some services. In return, they pay less for their medical examinations, emergency room visits and hospital stays than they would if they had no medical coverage. The PPO makes money because it requires the insurance company to pay to get access to the network of doctors and other service providers.
If there are any disputes between the providers and the insurers, the PPO will work with both sides to reach an amicable solution. In that sense, PPOs are not insurance. They are simply networks of medical providers. Instead of actually insuring patients, PPOs allow insurance companies to work with them in order to provide a network of doctors and providers that can be used with the insurance companies' policies.
The network information is then provided to the insurance companies and the insurance companies provide it to their patients. It works out quite well for a majority of people who have PPOs, although not all are satisfied. Dissatisfaction with PPOs stems most often from a lack of network providers in a person's local area. Because this can be a serious consideration, especially for someone who has significant medical issues, it is important than anyone considering a PPO for their medical needs first find out how many providers are in their area.
If they cannot get what they need from local providers they may have to get treatment out of their network – and that can be much more costly. The premiums of PPOs are generally slightly higher than what is offered by Health Maintenance Organizations (HMOs) and other types of plans. However, PPOs also provide something many other options do not: flexibility.
Because there are so many providers in the network, especially in large, urban areas, a person using a PPO has a greater choice of which doctor to see for a medical problem. It is possible to get lower premiums with a different type of medical care plan, but the lower cost comes with restrictions that some individuals may not be willing to accept. Having fewer restrictions can lead to better care in some instances and can also provide patients with the peace of mind they look for when they are dealing with medical issues.
There are arguments as to whether PPOs are better or worse than HMOs or other types of medical care policies or organizations. Ultimately, the choice of which type of provider network to use or what type of insurance to purchase must fall upon person being insured. Many employers offer some type of insurance or medical care option to their full-time employees, and PPOs are only one of the types considered.