PPO Colorado

The essence of the trend toward PPOs instead of health management organizations (HMO) is a concern over the flexibility of health care. Workers who switched jobs, moved across country and dealt with alternating economic statuses were unable to maintain steady coverage from the same insurer. PPO insurers have countered the inflexibility of a traditional HMO by negotiating discounted billing rates with hospitals, clinics and health care providers in all 50 states. The result of these negotiations has been a wide network of providers available to a PPO holder who is traveling or moving frequently for work.

PPO networks can take a variety of shapes depending on the unique health care environment of a particular region. Insured professionals in the Northeast and Southwest can use the flexible resources of a PPO insurer to take advantage of neighborhood clinics instead of massive emergency rooms for preventive care. Individuals in rural areas can access health care through a small doctor's office that is part of a preferred provider organization.
The majority of services provided through a PPO come from the largest health care providers in the United States. Massive health care organizations work with insurers to develop extensive fee schedules to ensure that individuals within a prescribed network are receiving the right benefits. An insurer with a nationwide reach provides access through a PPO to thousands of hospitals for busy professionals on the move.

An insurance applicant using a traditional HMO needs to declare a primary care physician before they receive care. Insurance companies offering an older style of health care want to know the primary care physician as a way to create an accurate premium. One of the major benefits for PPO participants is the lack of a primary care physician requirement on application materials. The flexibility of PPOs means that a professional can see any physician within the established network of providers without consulting a primary physician.

The reason why a primary care physician is an obstacle in other forms of health care is the necessity for referrals in order to get covered services. Insured professionals in this scenario need to get notification from their doctor that specialized services from therapists, podiatrists and others are necessary for current medical issues. A PPO participant can bypass this cumbersome process by finding a hospital or clinic with a specialist covered by the insurance policy. Health insurance companies pre-negotiate the specialists who are available to consumers based on pre-existing conditions and the complicated calculus of discounts created at the beginning of the PPO arrangement.

Consumers need to know why a PPO is beneficial to their insurance companies and health care providers to make an informed decision. The doctors and hospitals that form a preferred provider organization get the benefit of increased use of their services. An insurance holder participating in a PPO feels comfortable heading into the doctor's office for preventative care as well as emergency care. The discounts available on prescriptions, checkups and surgeries may decrease a hospital's revenue with one patient but increases revenue through optional services for a thousand patients.

The benefits of the PPO are not exclusive to the health care provider. Insurance companies created the PPO concept several decades ago to cut down on the costs to patients while maintaining a significant percentage of health care revenue. Insurance companies meet with the board of directors and clinic directors to run through discounts offered on services ranging from a simple checkup to a multi-stage surgery. While the clinics involved get a large chunk of the revenue to take care of overhead costs, insurance companies receive a percentage of each covered procedure to continue providing services to insurance holders. The benefit of increased traffic works for insurance companies as well as health care providers with the looming baby boomer generation creating a bonanza for preferred provider organizations.