PPO Discounts: “My Discounts are 37-55% Better Than Yours”

A large health insurance carrier has been touting their PPO discounts as being as much as 37-55% better than anyone else. And, three licensed consultants, each independent of each other, has “verified” those discounts. One consultant “proved” that average discounts on one rental PPO was 23%, while the large health insurance carrier PPO averaged 57% discounts. The PPO discount differential in this case, is a whopping 248%.
So, you would think that going with the better PPO discounts offered through this large health insurance carrier, the employer would see immediate and significant plan savings.
What we have found is the opposite. Not only are the so called discounts a figment of a salesman’s imagination, but provably untrue. Plus, in certain instances, the costs to the client actually went up, all things being equal.
We are in the process of documenting this using multiple case studies utilizing documented claim data. Once completed, this report should put an end to the unfair and untrue sales tactices employed by some.
A quote from an email received recently is a basic truth and shows the fallacy of comparing PPO discounts off billed charges:
“Our audits represent a complete flip to status-quo. We start at cost and add a margin (ground up) rather than start with the (phantom) original bill and take a percentage-off (top-down). This is much more in line with (A). common sense, (B). typical American business practices, and (C). fiduciary duty.

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