What happened with HMOs?
statmodeling.stat.columbia.edu
statmodeling.stat.columbia.edu
I feel like, at least in California, the majority of HMOs got usurped by HSAs which became popular after Obama-care kicked in. Many many companies used the threat of the never implemented "cadillac plan" tax to rework the benefits they offered. It wasn't unusual to have a couple both have different PPOs and effectively get improved coverage through "double coverage". It's still possible, but not with HSAs.
Assume that's a typo and you mean decades. Kaiser dates back to the interwar period and the modern version of it to the 70s/80s.
> For the majority it seems like it's a cheap but very rigid option (especially compared to PPOs).
I don't think it's cheaper on the monthly premium level, at least for me it's always listed as the more expensive option to choose from. If you end up using significant healthcare services it's probably cheaper than most PPO plans.
> People either hate it or love it because it is quite rigid in how it works (and you have to go specifically to their facilities).
I've noticed that too in my friend group. I've heard good things and the rare case that gets sent in to my academic hospital comes with a chart that suggests Kaiser is providing high quality care (in the Bay Area at least).
The rigidity is very annoying though, for example I wouldn't be able to get care at the hospital I work at if I went with Kaiser. Conceptually I like the idea of HMOs, seems less wasteful while still good quality.
I guess I understand the appeal of being able to pick any random doctor that takes Blue Cross Blue Shield, but this doesn’t appeal to me. I don’t know squat about picking doctors and might as well throw darts at a board. Most PPO plans I look at have vague pricing: “you pay 15 percent of the plan allowance.” Well, what exactly is “the plan allowance”? Kaiser quotes me an exact copay, like $30.
And then I read horror stories about people being unable to get an appointment with a primary care doctor for months, if they can find one at all. Many just go to urgent care or ER for everything. Not a problem with Kaiser. I can look through their primary care doctors and pick one. If I don’t pick, they assign me one. I can get an appointment with my doctor in a few days or a few weeks sometimes. If I need an appointment right away, I can get one with another Kaiser doctor, perhaps at a clinic I never go to.
I tried a non-Kaiser HMO for a year or two and hated it, right down to the doctor who answered his cell phone during my appointment. I look at PPOs and the opaque pricing kills it for me. Kaiser has been great.
I should have said it can be* very annoying, the rigidity isn't an issue for everyone and it really depends on your situation/healthcare needs and what your alternatives are.
The rigidity is mostly annoying when you want to see a specialist without having to go through a PCP (although this may not be a bad thing from a health systems perspective) or need advanced care (like cancer) that may be better outside of Kaiser (although again noting that they're still very good from what I've seen) and you want to choose where you get treatment.
Or if, like in my situation, you know exactly where you want to get your care and it's not part of Kaiser.
On average, 33 cents of every insurance dollar in the US goes to paperwork and paid negotiators on the doctor or insurance company side.
If hospitals and insurance companies established a standardized (regional) fixed price list for all procedures, auto-approved everything and asked patients to occasionally spot check bills for care they received (for anti-fraud), then all that could be automated, and the balance could go to increasing quality of care without increasing prices.
That would make them cost-competitive and roughly as convenient as Kaiser, but also less rigid than Kaiser.
That's misleading, this is the percentage quoted for overall non-clinical costs. The better number you should be mentioning is billing and insurance related (BIR) expenditures which ranges from 3-15% depending on the setting you're talking about.
Note that a fixed fee schedule does not eliminate BIR expenditures, Medicare which works like what you're proposing is ~3.5% for BIR. Canadian provinces are in the 5-10% range.
> If hospitals and insurance companies established a standardized (regional) fixed price list for all procedures
Should procedures cost the same wherever you go? The quality of care is certainly not the same although everyone meets the minimum standard. e.g. cancer care at Stanford is higher quality than at a neighboring community hospital, should they not be allowed to charge more for it?
In any case that's the point of PPOs, the hospital/provider has pre-negotiated/accepted the insurer's fee schedule for the year. It's not negotiated on every visit.
> auto-approved everything
Does anywhere do this? How do you control for unnecessary/wasteful use of resources? Neither HMOs nor the public Canadian health system auto-approve everything.
HMOs like Kaiser appear to "auto-approve" but they control the referral and keep a check on their PCP resource utilization and referral rates. You can't just walk in and demand a spine MRI because you've had back pain for 2 days, if the PCP imaging rates deviate from what is expected they will be audited and/or disciplined by Kaiser.
It really is a comprehensive system that rewards providers based on outcomes.
When you have a medical emergency, you’re covered. It’s pretty simple.
In PPO systems, you’re always fighting to understand when you are covered, at which hospital, by which doctor, using what machine. Sure there is choice, but how often do you actually have an informed opinion on what expert can best help you with whatever is happening to you in the moment?
With an HMO you either go into any hospital in an emergency and it’s covered for emergency care, or you go to one of their hospitals if it’s not an emergency. Very simple.
In my experience the level of care is great and everyone is actually trying to make sure you have the best outcome.
I’ve experienced positive results with their child birth system and have had a successful shoulder surgery. The care I and my family have had has been much better than my experience has been in the PPO system. Obviously experiences differ.
Kaiser Northern California was the highest rated HMO in the US the last time I checked, but that experience doesn’t necessarily extend to other regions.
I'm gonna have to disagree with you there.
But they wouldn't give me an MRI for my knee pain from the same injury.
So I switched to PPO (best plan I could get, anthem 250) which also denied my MRI.
Then I went to the ER for a back spasm, got muscle relaxants, $10k bill. Negotiated to $1k.
Healthcare in general in the US is a nightmare.
Don't pay your income taxes? Go to prison.
What punishment do you think is appropriate for someone who engages in willful tax fraud or evasion?
Failing that, nationalize the "healthcare" industry.
I'm only familiar with HSA as a Health Savings Account, and it doesn't make sense to compare it with an HMO in that context. Is there another acronym? Or are you instead referring to an HDHP, a High Deductible Health Plan?
Kaiser is unusual among HMOs, in that it is both an HMO and a provider organization where, for most covered services, Kaiser (as the provider organization) is the only in-network provider for Kaiser (as the HMO).
HMOs require you to get a referral from your primary care doctor to see a specialist, which has the added benefit of making sure people actually have a PCP. Primary care is one of the few types of care where the more you apply it, the better a patient's health outcome.
No one gets an HMO because they're scared of having less choice of which doctors they can see. They pay more to have a choice that's ultimately irrelevant to their health. Most people choose doctors based on friend/family referrals and Yelp reviews, meaning they don't know how to choose a doctor. Reviews/referrals have no relation to health outcomes.
The end of the article refers to the "medical loss ratio" enforced by the ACA, which did indeed incentivize insurance carriers to tolerate higher healthcare bills. This affects PPOs much worse than HMOs. It should all be burnt down.
Further reading, one of the best books on the subject: "An American Sickness"
I just swapped to the PPO version after retiring because the cost isn't any different, and I'm no longer in the area of the easy HMO's for them (Military Treatment Facilities).
I guess I can't fathom not having a PCP. As far as finding a Primary, what is your actual method for finding a good one if not by people who have experience with them?
> And a bigger problem is healthcare deserts. If you're in a rural area your options are limited by default
i don't care about that. unlike the last healthcare debat, i think i'll keep my doctor this time.
One gotcha I've run into is that most plans (both HMO & PPO) are only valid in a single US state. The one exception is "emergencies," but when I asked it seems this is basically only the ER (and I was told only if it turns out it's actually an emergency, whatever that means).
I believe you can get out-of-state covered via out-of-network. But as mentioned, the out-of-pocket max on my plan is shockingly ~6x more for out-of-network than in-network. So you won't pay 90% of $200k, but it will still end up a very substantial amount. But maybe that could still be worth it to see an out-of-state specialist?
See, this would be the expected, plain reading of out-of-network vs. in-network deductibles and coverage.
But be very, very careful with out-of-network: the truth is that your insurance only covers whatever percentage they claim they cover of the "usual and customary" charges for out-of-network care, not the the actual charges you receive. Because out-of-network providers are by definition not contracted with the insurance carrier, they can (and do!) charge you whatever they want. And then your insurance only pays for 10% of that, because they then claim that the "usual and customary" charge for whatever care you received is only 10% of what your provider charged you. (And, of course, the out-of-pocket max for out-of-network care is only for "usual and customary", not any charges beyond that—so it offers basically no protection.)
...which leaves you with a bill for 90% of $200k that you're not particularly in a position to negotiate—neither with your insurance company, which has no incentive to cover it, nor with your care provider, which has already billed you and will happily send your bill to collections (most of the time, though not all the time) and take XX% of it rather than give you a 90% discount.
So: on the one hand, you have zero price transparency before you receive care; on the other hand, your insurance contract has terminology that implies one thing but hides the reality behind reasonable-sounding legalese. One would be hard-pressed to design a worse system.
But it wouldn't surprise me if they were still coming in under the assumption that most people don't know they're disallowed.
Not sure how many companies do that. But I believe it may be quite common.
People don't have access to doctors' health outcome data.
Are there any useful proxies for that ?
And yes, if want a pill pusher or crooked doctor who gives you what you think you need without following evidence based medicine, a PPO is better for that. Those are going to be more rare on HMOs because the doctors in HMO networks are more connected.
Continuing the counterexample, recently my daughter had to be hospitalized literally a month after changing to a PPO. Amazingly, our $175,000 bill ended up costing me just $300 because she was admitted to inpatient care. If I had been on my previous HMO, it likely would have either cost $50k for the out-of-network, out-of-pocket maximum (assuming nothing exempt from that even...) or worse, delayed getting care while attempting to figure out any of that on the spot.
I don't know how true this is for the HMO story, but I do know that many patients absolutely hate being told "no" after they've convinced themselves that they need a certain treatment.
We've all heard the stories about the patient who was right about their own diagnosis but was denied care by their doctor, but these are the rare stories. Providers get bombarded daily by demands for antibiotics for colds, for example. If you're well educated about antibiotics you probably wouldn't believe the number of people who think antibiotics treat every infection and doctors are just meanies for refusing to hand them out. Many doctors get tired of fighting these battles and just write prescription after prescription for antibiotics on demand, which creates a loyal customer base of patients who are happy because they get whatever they ask for.
The situation is even scarier for controlled substances. The internet and sites like Reddit have a weird way of convincing people that they need Adderall and/or Xanax, and that doctors are evil if they won't prescribe them no questions asked. I've heard too many horror stories from my psychiatrist friends who get patients showing up demanding Adderall, but on closer examination will describe classic depression symptoms (e.g. having trouble focusing after a recent breakup, but no problems for the first 2-3 decades of life). Some of them have been convinced by Reddit (it's always Reddit) that ADHD is the explanation to their mental health problems and a high dose of Adderall will solve all of their problems.
Then when they say "no", they get pinged a few weeks later by the psychiatrist down the hall because the patient is back with a different doctor trying the same story. The sad part is that they often continue this rotation until someone shrugs and writes the prescription. A disappointing number of providers don't mind having a lot of controlled substance patients because it's a steady stream of easy appointments to write new prescriptions every few months.
> But something happened between 1978 and today. Now we all have HMOs
No, we don’t.
“Forty-nine percent of covered workers are enrolled in PPOs, followed by HDHP/SOs (29%), HMOs (12%), POS plans (9%), and conventional plans (1%)” [0]
And part of this is government policy actively promoting the HDHP/SO, and starting before that private market blowback of the provider choice issue in public healthcare policy debates as far back as the debates over the Clinton healthcare plan effecting marketplace decisions.
[0] https://www.kff.org/report-section/ehbs-2022-section-5-marke...
I now have a high deductible healthcare plan with like a $3000 deductible and the plan is “don’t get sick.” It’s disgusting and I work for a major university.
At that point it's not an HMO anymore and basically becomes a single-provider PPO with an added subscription fee.
> this incentivized insurers to increase dollar margins by growing revenue (and focusing less on costs) and to transfer profits from the regulated insurance side of the business to the unregulated provider side (see UNH and Optum).
Pretty much.
Everyone I know (ok, not literally everyone, but more than a few) has a PPO now. Am I in a weird bubble?
HMO = you have access to one provider
PPO = you can't preferred access (lower patient costs) to one provider, but access to all
Can you fix the typo in this please? "can't preferred" -I want to understand what you're saying, I can't infer it yet.
PPO = Preferred Provider Organization. You have a better deductible/coinsurance/copayment for "in-network" (preferred) providers who have negotiated their rates with the insurer (or accepted the insurance company fee schedule). You typically need pre-authorization for elective surgery and advanced medical imaging. You have the option to see someone "out of network" but with less coverage.
HMO = Health Maintenance Organization. Simple version is you don't get to choose your provider, you don't need preauthorizations and you have to go through your designated primary care provider to access specialists. For the most part you can only access providers within the HMO network if you want any coverage.
To be clear, in an HMO you don't need preauthorizations from your insurance but you still need your (not necessarily self-selected) PCP to order care or refer you to a specialist.
Many PPOs and public systems work in the same way, that's more about judicious and appropriate use of resources than payment authorization.
It should read...
You're correct.
HMO = you have access to one provider
PPO = you have preferred access (lower patient costs) to one provider, but access to all
"Back in the day HMOs were basically non-existent but promised cost containment, among other benefits. Now they are widespread but they didn't deliver on any of their promises."
https://www.nihcr.org/wp-content/uploads/2015/03/Congression...
its claim is that there's a shifting balance of power driven by the business cycle. employers expand coverage in random directions in boom times, someone gets squeezed in bust times
'who is the villain' in this mess changes faces from cycle to cycle
Put another way, health of the masses is down. Yet profits of the "health care" system is up. If you can get your arse up off the sofa...just follow the money. Anything else is a distraction.
I switched my family to a virtual PCP, you can text them any time, and they order all the same tests as anywhere else. I guess if you need someone to slap sense into you about being obese and smoking / drinking too much then going to a doctor could make sense.
Otherwise there is a standard schedule of tests for age groups. If you have a complex diagnosis you will need a specialist regardless.
I ended up buying marketplace plans, and the first two or three years, you had a choice between HMO and PPO plans; after that, it's obvious the local insurers (who also dwindled to one or two) decided all the market wanted was "it's the minimum that counts as coverage" Silver-tier HMO plans, all with the exact same (highest legal) copay/out-of-pocket limits, and either removed anything else or priced it stratospherically. I guess the health-care marketplace ended up much like the airlines after Expedia; they had to jettison anything appealing to look good on a price-comparison engine.
Once we had a guy visit the office trying to sell a HSA/HDHP plan; after three minutes discussing it after his visit, we all decoded that the basic premise of the plan was that it disincentivizes you from getting the care you actually need. It's sold on the concept of "you're an above average driver" (you won't ever be sick enough to actually need to tap the HSA) and promises of being able to stick the IRS with a tax-exempt savings scheme.
My current position offers a PPO or HSA/HDHP scheme and pays like 90% of the costs for your choice. I wouldn't touch the HSA option with a 10-metre pole.