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HMO’s vs. PPO’s, Med Times Copyright, All Rights Reserved, 2004-2005

By Alysha Khavarian

Yah, these are health care employers. Do you know the difference between them? You should if you want to be a doctor. Get educated. These are the two major health care employers of the health profession whose job it is to provide medical coverage for employees of many businesses and government agencies. HMO’s and PPO’s have negative and positive aspects that are relevant to every future physician. The names of these two companies makes the difference clear. An HMO is a “health maintenance organization” and a PPO is a “preferred provider organization.”

An HMO provides health care that is paid for by an employer at a fixed price per patient. This organization prevents the patients from having an “out of pocket” expense. An HMO is a company whose main purpose is to make a profit. The corporation gives priority to its stockholders over its patients. Another negative quality of an HMO is that it provides rationed care. The amount of time and money a physician can spend on a patient is limited. The HMO has a budget for each patient and the physician cannot exceed that budget. Other limitations include a patient having only one primary care doctor and visits being restricted to a specific hospital. What does this mean for the physician?

HMO’s restrict the physician’s ability to care for a patient. A physician’s primary objective is to complete the rounds for that day. The physician cannot find the time to cure every patient within the 15 -30 minutes the HMO allots to each patient. Becoming a doctor for an HMO is like entering a business contract. The doctors are workers for the benefit of the corporation and providing health care for an individual is the product they sell. The universal analogy used is of a processing and packaging conveyer belt. The patients are objects on the conveyer belt while the doctors serve as workers on the packaging line.

PPO’s are also a corporation, but they have a unique way of providing health care. They provide the highest level of benefits with an “out of pocket” expense from the patient. They allow a patient to go to any doctor and visit any hospital anywhere in the country. This business allows for a higher level of flexibility that is maintained by the patient’s willingness to pay more money for health care. This system also allows the physicians more freedom in practicing health care. However, the additional money patients pay does not go to the physicians. The extra payments go towards increasing the patient’s budget and maintaining his or her satisfaction with the company.

Both HMO’s and PPO’s are businesses that sell health care. The difference between them is the quality of care a physician can provide to a patient. HMO’s restrict the health care based on the company’s expenses, while PPO’s limit the health care in regards to the patient’s financial capability. Physicians have the difficult decision of deciding which organization to enter so that they can better serve people in need of health care.