This essay discusses the key distinctions between PPO and HMO health plans. HMOs are a type of managed care organization that offer healthcare services to members using a network of participating providers. Usually, HMOs will require members to pick a primary care physician (PCP) from the organization’s network of providers (Barnett et al., 2021). The PCP will be responsible for coordinating the member’s health care and making referrals to specialists within the HMO’s network as needed.
A PPO is a type of managed care organization that does not require members to select a primary care physician. Instead, members can see any provider within the PPO’s network without a referral. PPOs usually have higher premiums than HMOs, but offer more flexibility in terms of which providers members can see (Barnett et al., 2021). HMOs typically have narrower networks of providers and require referrals for specialist care.
Another key difference is that HMOs require members to receive care from in-network providers, while PPOs typically allow members to see out-of-network providers which can include higher out-of-pocket costs for doing so. HMOs use gatekeepers such as primary care physicians to help control costs by managing utilization (Bai & Anderson, 2018). In contrast, PPOs do not use gatekeepers and instead allow members to see any provider within their network.
Finally, HMOs and PPOs differ in how they handle prescription drugs. HMOs often require that members use specific pharmacies and mail-order services for their prescriptions. They may have their formularies or lists of approved drugs. PPOs do not usually have these restrictions and members can use any pharmacy they want. Besides, HMO plans require a person to receive care from doctors within the HMO network and will not cover out-of-network care except in an emergency (Barnett et al., 2021). A referral from the primary care doctor to see a specialist in an HMO coverage setting.
In conclusion, each health care plan has its unique advantages and shortcomings that influence the choices people make while considering a health coverage plan. Some people may prefer the lower premiums and greater control over utilization that an HMO offers, while others may prefer the flexibility and freedom to see any provider that a PPO offers. Ultimately, it is important to evaluate both types of plans before making a decision.
References
Bai, G., & Anderson, G. F. (2018). Market power: Price variation among commercial insurers for hospital services.Health Affairs, 37(10), 1615–1622.
Barnett, M. L., Bitton, A., Souza, J., & Landon, B. E. (2021). Trends in outpatient care for Medicare beneficiaries and implications for primary care, 2000 to 2019.Annals of Internal Medicine, 174(12), 1658–1665.