The Top Benefits of Choosing an HMO
In this article published on October 20, 2016 in the Sacramento Business Journal and San Francisco Business Times, Rob Carnaroli, vice president of Sales, Sutter Health Plus, discusses the top advantages of selecting an HMO during open enrollment.
When preferred provider organizations (PPOs) first became an option in the 1970s, many people enrolled for the flexibility in selecting providers of their choice — even if it cost more. Since that time, there has been a shift in the industry as HMOs gained popularity. By January 2016, more than 92 million Americans were enrolled in an HMO plan, according to the Kaiser Family Foundation.
Employers and employees select HMOs over PPOs due to lower costs and high care coordination. Take a moment to read about just a few of the top advantages of selecting an HMO.
Focus on care coordination
One of the main benefits of an HMO is the high level of coordination between providers, which helps simplify care for members and keeps the costs down. With an HMO, members select a primary care physician (PCP) who provides most primary care and coordinates care members may need from other providers. This includes referrals to specialty care, X-ray, laboratory and other services. Members may see an out-of-network provider only if their PCP or medical group refers them for care, such as when there is not a participating provider who can treat a specific condition. HMOs also tend to focus on wellness and disease prevention, and many will partner with employers to create programs specifically tailored for their employees.
Lower overall costs
Most HMOs pay providers by capitation to help control health care costs. Under a capitated payment arrangement, HMOs agree to pay providers a fixed amount per member/per month. This places the providers at financial risk for member care and encourages care coordination among participating providers. In turn, it allows HMOs to price plans more competitively, which is why HMO premiums are usually lower than PPO premiums.
Today, there are a variety of HMO plans to choose from, including copayment plans, coinsurance plans and deductible plans. In recent years, we’ve seen high-deductible health plans paired with health savings accounts gain popularity due to lower monthly premiums and the potential tax savings.
Many people shy away from selecting an HMO because they don’t like the idea of narrow networks. It’s important to keep in mind that “narrow network” doesn’t mean restricted access. In fact, in California the Department of Managed Health Care (DMHC) requires HMOs to ensure members get timely access to care. This means the state places limits on how long members must wait before seeing PCPs, specialists or other health care providers. You can visit dmhc.ca.gov to learn more.
In addition to highly coordinated care and lower overall costs, many HMOs provide additional services to members. This may include access to a 24/7 nurse advice line, a member services call center, online portals to see or manage benefits or communicate with providers, wellness programs and disease management programs. A high level of customer service, including new member welcome calls, are features members may find with HMOs.
Today’s employers and employees want a health plan that’s both affordable and easy to use. As you contemplate your choices this open enrollment season, take another look at all your options. In addition to premiums and out-of-pocket costs, carefully consider the provider network, care coordination and member perks—you may discover an HMO is right for you.