chapter 7 ppo vs. hmo

HMO

A Health Maintenance Organization, or HMO, is a network of providers from the primary care physician to specialists, who are most times connected to a particular hospital and particular network affiliated medical offices. In an HMO plan, once a primary care provider is chosen, this physician acts as gatekeeper for other services. Non-emergency medical referrals and needs must always be preapproved by the primary care provider in order for the insurance benefit to be paid

Disadvantages to a PPO Network

A PPO network can have a large array of providers. These providers' fees can vary greatly even when comparing the same procedure. Because PPO networks do not keep medical files centrally located, obtaining medical records quickly and easily may be difficult.

PPO

A Preferred Provider Organization, or PPO, allows the covered individual to choose providers for medical service that are within or outside of the PPO network. Choosing a physician outside of the PPO network will cost more out-of0pocket, but coverage is existent. Health care provided by specialists does not require a referral; however, some specialists may require a referral before making an appointment. Providers are paid a reduced rate by the insurance company to insure a large client base

Disadvantages of HMO

Many HMO networks exist in larger, metropolitan areas. This serves as a disadvantage to patients living in rural areas. Individuals in these areas may need to drive unwanted distances to receive needed medical care. Getting a second opinion when covered by a HMO network can be very complicated. Once a primary care physician is chosen it is difficult to change to a different primary care physician. This relationship is very important as it serves as the point of access for all other medical needs

Advantages of HMO

Medical costs can be inexplicable in many cases. In an HMO network, the guidelines for medical charges are very rigid and predetermined, allowing for easy budgeting. HMO networks also have a reputation for delivering a high quality of care due to the high standards set for providers allowed into the network. Another advantage is easily accessible medical records. HMO networks maintain medical records centrally so all providers have easy access to patient records and saves time by allowing immediate access

Advantages of a PPO Network

Once a patient enters a PPO network, there is no "gatekeeper" needed for referrals to specialists. A patient in a PPO network can choose any primary care provider or specialist they desire, although physicians in the network will come at a lower out-of-pocket expense. Obtaining a second opinion or switching doctors is very easy. For patients living in rural areas, receiving medical care is much easier, as the PPO providers are generally in most locations.