Archive for July 18th, 2010

Upcoming Funeral for PPO’s Announced

Sunday, July 18th, 2010

Health Care Reform will end PPO’s as we know them today. Effective January 1, 2012, “Insurers must submit annual reports to Secretary on disease management, care coordination, hospital readmission rates, patient safety and provider rate reimbursement structures.”

Provider rate reimbursement structures, or fees, will become part of the public domain and no longer hidden in secretive PPO contracts.

The secret world of PPO provider contracts will be no more.

Sometimes change is good. This is good.

Less is Better

Sunday, July 18th, 2010

It started three years ago with employers beginning to realize the fallacy of PPO network discount “savings” and finally doing something about it. Bill Miller BBQ, a San Antonio based restuarant chain, was the first employer in Texas take the initiative¬†which started the Cost-Plus revolution (Bill Miller Forbes).

Relying on less providers to provide health care makes sense for both the consumer and the provider. It has certainly worked well for Bill Miller BBQ and over 45 other employer groups in Texas that have followed their lead.

Providers get paid a fair and reasonable fee, quickly and hassel free while consumers enjoy significant savings. And, the situation gets even better with improved benefits to the employees, and less Accounts Receivable problems for the providers.

With the savings realized, calendar year deductibles can be removed, hard to track out-of-pocket expenses are eliminated, replaced with a co-pay system in place for all benefits, including hospital admissions. Patients know up front what their cost will be, and providers know up front what their reimbursement will be too. No secretive PPO contracts to worry about – total transparency.

¬†Now that Health Care Reform has passed, carriers are scrambling to make sense of the bill, and devise strategies to survive competitively in the upcoming months and years. Carriers are beginning to realize that “Less is Better” too, as outlined in a recent article (http://www.nytimes.com/2010/07/18/business/18choice.html).

In an earlier posting, we noted that there will be tremendous opportunities for those of us in the insurance industry that have the ability to think out of the box and seize upon events as they unfold in the marketplace. We promised to post a piece on “Opportunities Before Us that Will Make Us Millionaires” in total, however with things moving so rapidly these days, we decided to provide this posting as a hint of future postings to be made here for the benefit of our four readers (yes, we added one new reader over the weekend – thank you Dino).