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Your employees have access to an unlimited company credit card

Medical insurance carriers tout the fact that they have 90-99% of all doctors and hospitals in their network. Why? Because employees that use in-network providers pay less out of their pockets and when that happens employees are happier, and happier employees is a message that sells.

Just slap a Blue Cross Blue Shield, United Healthcare, Aetna or "Name That Carrier" PPO logo on the medical ID card and your employee has a 90-99% chance of paying the in-network deductible instead of the out-of-network deductible.

To your employees, it's a comfort blanket. But guess who has to pay the balance on the credit card statement? You, the employer! The size of your PPO network could be costing you more money than you think. Learn why in the video above. 

Does the size of a PPO Network matter? Well, let's start with the definition of PPO preferred provider organization, now, I'm going to give back to the definition of that. But to the question does size matter? Well, let's look at it from both the patient perspective and the employer perspective if you're the patient and you want to go wherever you want, then the size of a PPO network is probably pretty important to you because the bigger than that word the more choice you have but what if you're a patient and you want to go specifically to a quality provider, which At the end of the day don't we all want to see a quality provider? I argue the bigger the network the higher chance you have of going to a crappy provider because the typical consumer does not have access to Quality data up front. If you're an employer you might be thinking the size of a PPO network is important because the bigger the network means people can go wherever they want and they'll be less noise. But the counter to that is the same consumers just don't have the right tools to be able to effectively evaluate cost or quality upfront. And without those tools. How do you distinguish between a high-quality low-cost provider? And a high cost low quality provider that PPO logo on the ID card is basically an unlimited company credit card employees can go wherever they want regardless of host or quality and the employer picks up the tab. Okay. So what if you're in a rural area where there's one major hospital system and that hospital system is only contracted with one insurance carrier. Well, then size is pretty important because first and foremost patients need access to Providers, but if you're in a major metropolitan area is bigger always better. I'll answer that and come back to the definition of PPO. preferred provider organization So let's say you're a teacher how preferred would you feel if you were in the top 99% of all teachers? Yes. I mean you were in a peer group with 99 out of every 100 teachers. Do you feel preferred there could always be an argument that the size of a PPO Network matters like one Hospital town but having 90 to 99%of all providers in network is not necessarily a good thing. So here is advice don't assume the size of a PPO network has any correlation to the cost-effectiveness or quality of providers in that Network. It's a comfort blanket because of the virtually unlimited choice in providers, but without the right tools to be able to effectively evaluate cost and quality up front. It can be one expensive blanket.

About the Author

Mike Kroupa, Self-Funding Insurance Expert

I grew up in a house that was constantly under construction and the experience helped me uncover one of my passions, remodeling. After running a successful remodeling business with my brother during college, I decided I wanted to keep this as a hobby. Instead, I took my advisor’s recommendation and started down the actuarial path, which ultimately led me to insurance.
Since then, I have focused my career teaching employers how to better manage their health insurance plans. I found myself frustrated year after year of doing the same thing because it didn’t feel like I was making an impact. Healthcare costs were continuing to increase, and it felt like the only options employers were left with was increasing deductibles, increasing contributions, and switching carriers.

There was a turning point for me in 2020 as I found Health Rosetta, an ecosystem for scaling adoption of practical fixes to our health care system. As my clients started adopting these fixes, I found myself getting passionate about what I was doing for the first time. Then I realized my hobby of remodeling was driving the passion because I was remodeling health plans. Even better, I was having an impact because patients (employees, spouses and children) were getting the best care they ever have and saving a lot of money in the process.

Get in contact with Mike: 

Phone: 630.738.1835     Email: mkroupa@gocgo.com     LinkedIn: Mike Kroupa

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