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Tip of the week: The variety of healthcare insurance plans

Contemporary Long-Term Care Weekly, December 10, 2009

Administrators are usually heavily involved in choosing the health insurance plan for a facility. Choosing a plan requires addressing the needs of employees while not creating a financial hardship for the facility. For most healthcare facilities, especially long-term care facilities, contracting with Health Maintenance Organizations (HMOs) or preferred provider organizations (PPOs) has helped to keep costs down slightly. HMOs and PPOs are two types of insurance explained below, in addition to one other:

• HMOs came to fruition through the HMO Act of 1973. They typically employ their own physicians and often own the clinics that service many individuals. A major impetus for HMOs is cost containment.
• Similar to the HMO, the PPO seeks to lower medical costs by contracting with physicians and hospitals to increase the volume of service. However, in PPOs physicians are usually independent practitioners who do not work exclusively with one organization.
• A multiple-option or point-of-service plan allows a person to choose services that are offered through a variety of plans based on the needs of the individual and his or her family.

This is an excerpt from HCPro’s book, The Long-Term Care Administrator’s Field Guide, by Brian Garavaglia, PhD.

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