I read with interest "Ease Headache of Choosing Health Plan" (Dec. 8). However, there were some inaccuracies.
The major misstatement made in the article was that in a Preferred Provider Organization, the member has freedom of choice of physician. This is entirely untrue.
The PPO consists only of those physician or hospital providers who accept the discounted payments from the underwriting insurance company. Anyone not using PPO providers is then "indemnified" by the insurance carrier who also contracts with the PPO.
In other words, the insured either use PPO providers or they are covered by the insurance plan and not the PPO. Health-plan options including PPOs are really two types of coverage (an open-ended "swing" plan if you will) rolled into one marketing package.
PPOs are not new or cost effective. As you will recall, many years ago Blue Cross and Blue Shield asked hospital and physician providers to accept, as payment in full, a discounted fee for those patients who joined Blue Cross or Blue Shield. As consumers are aware, Blue Cross/Blue Shield plans are some of the most expensive available.
In essence, PPOs are little more than the tired "Blues" programs, repackaged and renamed to help the insurance industry recapture market share lost to HMOs and self-funded plans over the last decade.
If we in America have learned anything about health-care costs over the last 20 years it is that these costs cannot be reduced by paying providers discounted fees.
The number of services always increase to more than offset the reduction in fees. Health-care costs can, however, be contained in a setting where the manager-provider of care is impacted financially by prudent use of discretionary treatment options as in an HMO.
Under a prospectively paid (fixed advance payment) system, the physician and hospital are no longer paid more for doing more, they are paid for doing what is appropriate--no more, no less.
With the choices now available, consumers are well advised to consider all options.
As more and more of the costs for health-care services are heaped upon the consumer, my bet is that they will end up buying a piece of the doc instead of a piece of the rock. After all, HMOs save money by making sense.
DAN ALAN BOSWELL
Executive vice president