The top achievement of RiskMangers.us in 2008 was to peel away the onion layers of the PPO world to expose the truth behind PPO discounts. It has been an interesting mission indeed. We met with hospital administrators, PPO network officials, PHO groups, all of the BUCA’s to learn as much as we could about the mysterious world of hospital and physcian pricing. One of the BUCA’s told us that we would never, ever get our hands on one of their hospital contracts. They were wrong. And what a story their hospital contract told us!
One interesting assignment in 2008 was a newly acquired client in North Texas, a political subdivision, who for the past ten years were sending their employees to one of the two hospitals in the area. Hospital “A” was the “better” hospital because it was in-network, while Hospital “B” was out-of-network. What we found was that the charges at Hospital “A” through the PPO was three to four times higher than the charges at the non-network hospital ten minutes away. So, in essence, employees and their families were steered to a higher cost facility and thereby increasing the Plan’s cost by over $1 million a year for this small group of about 350 employee lives.
There are numerous other stories regarding our quest for truth about PPO’s that are fascinating but for the purposes of this post, would be quite lengthy.
As a result of our quest for truth, in 2008 we moved several of our more progressive clients from the PPO world into the darkness of the unknown – back to the 1970’s when PPO’s were not yet invented. We had the audacity of recommending that our clients may save more by getting away from the PPO world and dealing direct with the provider community – results so far have been good.
What is interesting is all the players watching our intentions play out jumped on the “Your gonna be balance billed and boy are the employees going to be upset” bandwagon. Through a strategic partnership, we solved the problem of balance billing once and for all.
We have also learned that you can partner with a PPO on a client specific basis to achieve similar results. We found this to be particularly true in working the El Paso market.
We are looking forward to 2009 with the many changes sure to come.