HMO’s vs. PPO’s – MD Explains HOW to Pick a HEALTH INSURANCE Plan

Freedom to see whoever you want is not necessarily only an outpatient thing but it's also inpatient so if you land in a hospital need bypass surgery because you just had a heart attack theoretically you may not have access to all the surgeons that are available even within that hospital dr jonathan bhaktari.

You can see it i mean it's crystal clear i think it's going to really revolutionize things which is a big game changer hi welcome to another episode of baktari md i'm dr jonathan bhaktari and today i want to talk to you about health insurance.

It's open enrollment time and a lot of us are struggling about how to proceed and make the right decisions for ourselves for our family for our children and you know there's a lot a lot of confusion a lot of complexities in picking the right insurance plan and i want to.

Really talk about this so you can approach this decision from a place of knowledge and information because what i'm about to share with you doesn't necessarily tell you what decision to make it just helps inform you so when you do make a decision you're basing it on all the facts.

And let's start off with the biggest issue which is hmo versus ppo i think this is something a lot of people struggle with because you know the lore of an hmo is often you know better in terms of economics and ppo is often better obviously for many other things such as.

Choice a variety of options and what have you so what i want to compartmentalize is broadly what an hmo versus the ppo is in the most broadest sense i mean within plans there's different grades and different deductibles and all of that but let's just put that out on the side for a.

Second what i want to talk about is when you choose an hmo it's generally cheaper now why is an hmo generally cheaper the way hmos are able to provide you with a product at less price is obviously because they cut some things out what do they cut out broadly speaking broadly speaking what.

They cut out is often your choice your choice to pick a doctor and often your choice in determining what is medically necessary and often that choice is also removed from you and your doctor about what is medically necessary so you have to understand that the way the health insurance is able to cut.

Costs on an hmo is by doing those things in broadly speaking one they limit the number of physicians you can see which in itself you would think shouldn't be cheaper but it is because the the doctors that you are going to be able to see.

Are going to be managed differently in an insurance plan often doctors are either employees of the insurance plan or even if they're contracted the way they're compensated incentivized and monitored is by looking at their.

Utilization so those doctors may or may not have certain incentives to be cost effective in managing your care which by the way sometimes can be good we certainly don't want excess as an over testing and what have you and also they serve as a gatekeeper to often.

Try to handle things which may be a normal primary care doctor in a ppo would not want to take the extra time with is to make sure you don't run off to a high price specialist when in fact it could be managed by your primary doctor so if all the cost savings are not.

Necessarily bad in the sense that they're if you want to use analogy they're cutting some of the fat i think what happens is depending on the hmo or the particular situation there's a fine line between you know cutting the fat and and cutting into the bone which is you know cutting back too much.

So i think when you signed up for an hmo and you get a lower price what you're in in essence doing is giving a lot or some of the control back to the hmo and taking it away from you any potentially even your doctor because.

In a lot of standard non-hmos you and your doctor for the most part pick what's medically necessary what's appropriate often what medication but when you go to an hmo they will limit your care to what they determine is medically necessary and then even on the farmers on the pharmacy side they have a.

Limited formulary which often includes cheaper drugs within every category often and only after you have gone through the hierarchy from cheapest often most expensive can you get access to some of those other drugs so i think all things being equal you have to understand for the most part when you pick an hmo.

You're consciously deciding to get less of a product not in terms of medical care but some of those other intangibles for a lower price i i mean the way i'd like to serve it up for the most part if an hmo costs the same thing as a ppo nobody would ever pick an hmo so you have to understand when you pick an hmo for the most part you're picking it.

Because you value the economic advantage of having an hmo meaning you're going to pay less ideally so i don't think anyone should fool themselves in saying oh i'm an hmo person i like hmo because there are severe downsides.

And even you know some of the good sides of an hmo where they make sure excessive care is not given and excessive procedures aren't done you know you could probably get that same benefit in a ppo plan if you picked the right doctors and did your homework and you know we're a little bit diligent.

So some someone could make the argument that you can get all of the benefits that a ppo give you meaning the benefits in terms of excess of procedures excessive tests excessive visits and you know unnecessary high or expensive prescriptions when there was a cheaper one.

So those are all potentially you know potential things that could happen yes and an hmo will definitely do a better job potentially at that but you could theoretically given the right skill sets and the right doctors you.

Could theoretically capture that without giving up some of the autonomy and getting back to this idea of picking your doctors too you have to understand with an hmo often that hmo is confined to a certain geography a certain location or cert and within a geography maybe a certain set of doctors.

So um if you wind up wanting to go to a world-class medical center for a particular problem you want to go to stanford harvard ucla it may be that your hmo is not going to allow you to go now if you're healthy and nothing's going on you're probably thinking well what the heck you know.

I'm okay with never going to an ivy league medical place but god forbid if you do get a rare complication and you need a bone marrow transplant a liver transplant or anything very complex you may want the option.

Of going to one of these major major institution md anderson for cancer these are options that often you're taking off the table not always but often when you decide to go with an hmo and so what i'm here to tell you is i'm your advocate i'm not saying you shouldn't.

Sign up for an hmo i'm simply saying if you do you should know what you're taking off the table potentially not all hmos are the same some are different some you can appeal some you can make a case for it but it won't be as simple as if you were not in an hmo and you need to understand that you know far too often i hear people.

Who come down with something very rare and they're relatively young but they're stuck with an hmo and they say to me oh you know if only i knew if only i knew how restrictive this was i would have never signed up for it but again that's easier said than done when you're young or middle-aged and healthy and have no issues.

And you're looking at two bills you know you know one you know hundreds of dollars more a month potentially maybe more than the other one and saying i'm healthy nothing's going on with me well why not choose the cheaper one but again that's okay i mean the cheaper one's.

Always better if you never get sick and never need something complex and never need the ability to make your choice of where to go and what to have so i think you need to understand that and as long as you do then an hmo might be the right thing for you i know this insurance stuff is.

Complex it's like it has its own vocabulary its own universe so if i can help you please leave a comment or a question below and i will try to give you as much help and insight as i can i'm here to kind of help you at least navigate some of this so you can make the right decision so let's move on and just talk about ppos now ppos come in.

All shapes and flavors and and combinations but again i'm speaking only broadly and and there are hybrids and what have you but uh you know i think the way ppos approach it is and i think you have to be careful for pbo's too is you wind up having large large potential deductibles that you have to.

Get through before you get there and what have you but generally speaking ppos will offer you a wider selection of physicians and depending on your ppo you may be able to go uh you know out of your geographical area to other states and what have you so.

You have a lot of benefits that you may not and yes while the insurance company may review some of the tests that you are ordered for you what have you by and large more of the medical decision making is between you and the doctor uh as opposed to you know some bureaucrat sitting in insurance company.

Uh who doesn't know you so you know i'm gonna go out on the limb and say if you had an option for a ppo and hmo putting aside that some pbos can have very large deductibles but let's put that aside and you know equal that out the only time to really pick an hmo is.

If the finances are a huge part of your decision making it's just like anything else when you go buy a car you could buy mercedes you could buy chevrolet i think if a mercedes and a chevrolet cost the same thing i think almost it's fair to say everyone would pick a mercedes for the most part.

So i don't think there's this delusion that somehow hmos are is you know better for certain people and and ppos are better for others i think you just have to make a decision you know in terms of economics because not everyone can afford whatever high price ppos are out there.

But you have to understand a lot of times if medical care is important to you and if something were to happen to you and you want to have more choices more options more control if that that's important for you then you know ppo might be a better decision especially if you can make the economics.

Work so in summarizing some of the sort of pitfalls of an hmo again i think we talked about taking control away from you and your doctor i think what that would look like is for example pre-authorization if you need a certain procedure done you know the decision.

Often may not be just between you and the doctor that you need this done that the insurance company will pre-authorize many their medical directors or their people will sit there and say well um you know we don't think this is medically necessary because of whatever and they will supersede your doctor's decision so.

That's number one often the doctor who they've contracted with or employ is incentivized you know not to uh do too many tests too many procedures so between those two things between the doctor being reticent often especially if something's on the fence as well as even if he or she is willing to authorize it or order it it still.

Needs to go past another hurdle so that that is much more classic in an hmo than a ppo although certain things are still authorized in a ppo also but not to the extent it is in an hmo so i think you understand there's this concept of pre-authorization the other thing i hit really pawn on is your.

Formulary for drugs is going to be severely limited and if you need some of the newer potentially higher price drug again you will possibly need pre-authorization much more so than if you were in a pbo setting the other thing i mentioned too earlier is the gatekeeper phenomenon al so one of the main ways hmos are able to.

Save costs is they control which specialists you can or cannot see often and to get to see an endocrinologist or rheumatologist you can't directly go to them you would have to go to your primary care doctor he or she would have to decide.

That they themselves have exhausted what they can do for that issue and that it warrants a specialist so those primary care doctors may or may not be the ideal person to take care of that issue given the complexity what have you but certainly in an hmo or ppo they're going to.

Potentially try to manage it themselves and potentially block you from seeing a specialist and you know while potentially that might be good so you don't unnecessarily see specialists it can also delay you from seeing a specialist.

When the condition warrants so that can work both ways and just a quick side note you know to get raw information like this that you probably can't find anywhere else please like and subscribe our channel leave comments below we want to help and grow this and bring this to more people so i really need your help if you like this want to see more stuff.

Like this give us your feedback the other really important thing about hmos you have to understand is when you get into the hospital many hmos have contracted out with hospitals group which means they have a set of doctors who are going to be uh incentivized to get today good care.

Of you but they're also be incentivized to make sure that your care is very efficient and that your utilization in the hospital is you can sometimes say appropriate but otherwise you can say efficient which means that.

They're going to be very concerned about your length of stay how many specialists you see what kind of procedures you get in the hospital what has to be done in the hospital what can wait for you to get out and you know i don't think it's any secret that people who often are in.

Managed care facilities get discharged potentially earlier maybe appropriate maybe not but that certainly efficiency is there now some of those built-in efficiencies because you know hmos have extra resources to get you out quicker and manage you quicker but that's you know not always the case.

And so you have to understand that when you get hospitalized and you have an hmo sometimes that can mean that you get a level of care that's slightly different potentially because they're there not only take care of you but to manage their resources.

Effectively and how that impacts you is you know potentially variable but even in the hospital potentially the range of doctors you could see may also be limited by who who in that hospital on staff is also under contract by your insurance plan so.

Even within a hospital there may be three heart doctors that you know are all good but potentially you may only be able to see one out of the three if that one is contracted with your hmo and the other two are not so.

Giving up freedom to see whoever you want is not necessarily only an outpatient thing but it's also inpatient so if you land in a hospital need bypass surgery because you just had a heart attack theoretically you may not have access to all the surgeons that are available even.

Within that hospital right so you need to understand that that you are not necessarily going to be able to pick from the entire staff even at a hospital so and to make it potentially even worse you may you know especially how you get depending on how you get him in the hospital you may not even get to pick.

The hospital of your choice if you're an hmo plan so i think you know so far it sounds like you know everything i've been reviewing is negative about an hmo it's not necessarily negative you know there's plenty of hmos that give great care plenty of hmo doctors that are fantastic but you simply can't bear your head in.

The sand is and say oh hmo ppo same care less price let's go with the lower one you are giving up something and maybe i'm willing to tell you straight out but you are you're giving up something the only question is what is it you're giving up and just to get even a little more granular about your hospital stay.

You have to understand if you're in hmo and you go to the emergency room you know often it may or may not be the emergency room doctor's decision to admit you but even so in many hmos they're actually going to talk to a contract at hmo doctor.

Who can potentially then decide to admit you or refer you to a contracted facility that the hmo has for a low lower level of care like a nursing home or a rehab so it won't always be just the emergency.

Room doctor's decision whether it meet you or not that if you're in an hmo there will be some utilization done and even potentially at at an er level so you know people think that when they give up some of their autonomy it's just going to be an outpatient setting where.

They give up their autonomy with their doctor where yes they and their doctor won't be able to make potentially all the decisions that someone else may have a say in it but that also applies to pharmacy that also applies when you go to the er and whether you get admitted or where you get admitted to.

And that also applies to your choice of doctors not only in an outpatient study but even in an inpatient setting you may have to give up some of that autonomy the other thing you know you have to understand in an hmo what you also may be giving up is your access to.

A medical doctor often more and more managed care facilities are using physician assistant and nurse practitioners to address frontline concerns especially in an outpatient setting and actually surprisingly also now maybe a little more in the inpatient setting so you need to understand when you sign.

Up for a ppo you know it may be you'll get to see an md most of the time or maybe that you will not get to see an md most of the time and potentially it may not even be up to you if you do see an md or a pa nurse practitioner now taking nothing away.

From nurse practitioners and pas but you know the issue is not whether you should or should not see a pa or nurse practitioner the question is will you have a choice okay and i think you know practically speaking you may not maybe some hmos will tell you you you will have a choice.

But often in certain situations where the rubber meets the road those are the only people available or readily available in certain situations so you have to scout that out because when you sign up for an hmo you have to ask will i actually see a medical doctor and i think the argument.

You're going to get from hmos is for most routine care colds and sniffles and what have you a pa a nurse practitioner is as good and i won't argue with that but the point is do you have a choice let's say you don't want to see a nurse practitioner pa what what are your choices and even if you do have a choice.

In certain hmos broadly speaking i think you're giving up some of that ability whereas in a private sector when you sign up with a doctor you can pretty much say hey will i be seeing you and if he or she says no then you say okay i'm gonna go find another doctor where that's the person who i will be.

Interfacing and lastly you know when you sign up for an hmo and the care is delivered by a group of people who vary you know are you going to be able to get that longitudinal connection with a primary care doctor now in some hmos that's true you will always see for the most part the same.

Clinicians whether it's a pa nurse practitioner or md or do but i would say as a generality there's you know more change over and and more interchanging of of potential providers than there is in a ppo settings because you can control.

That if you sign up for a ppo doctor and he's never or she's never the one to see you well you know what you could just move uh but when you're in a ppo until it's time to switch again you may you can't just pick up and go so i think that ability to sort of vote with your feet.

I think goes away until the next time your renewal comes up you can't always you know vote with your feet in an hmo setting as you can with a ppo setting where if you're not necessarily getting the care that you want in a ppo setting often you have the ability more so.

Than an hmo setting to literally vote with your feet so um the next thing i want to talk about is um you know when you're trying to choose a plan even for your company or um or if you're trying to choose for yourself but even for a company often you have to understand that you know most people do that by going to.

A broker and a couple things about brokers generally brokers are incentivized by the commission they make on the plan they sell you and often hmo plans are very aggressive in in rewarding brokers.

To bring in plans and also since the plans are cheaper they're you know it's an easier sell often for the brokers to sell a company or business and a hmo plan because at the end of the day if you can't sell your product because it's too expensive you rather sell something that's cheaper.

That you think the person will buy or accept so you have to be careful that when choosing a plan there is a natural inclination just to use the cheapest one if you are not if you haven't watched this video for example and understand what you're giving up and you say well.

I'm not really giving up anything i'm just buying something similar but a much lower price so i think brokers themselves may not understand some of the things that people are giving up and also it's easier for them to sell a cheaper plan to a new business owner or to someone thinking of switching their company.

Because of the sticker shock potentially of a ppo and but to be totally fair uh i think a lot of companies also realize that you know they don't want to provide a hardship for their employees in terms of signing up for a ppo but i think a good good situation would be.

If if an employer offered a basket of things some ppo some hmo but if you're if your employer is just basically offering an hmo i know sometimes that comes from a good place because they're thinking oh i don't want to place a burden on my employees especially if the employees have to pay.

Their share of the insurance payments so they think they're helping their employees but you know it's only a help if you never need the plan but if you do need the plan you may realize that that wasn't the plan for you.

So before i end i also want to talk about a ppo obviously reading between the lines i think you understand depending on the ppo depending on the deductible not all ppos are you know the same and not all hmos are the same but all things being equal i think reading between lines i think you you.

Probably figured my position is that if you can afford it and you could afford the deductible and you could afford the payments all things being equal you know you're probably going to have more flexibility with a ppo uh having said that there are some downsides and i've alluded to it slightly in this video and in other.

Videos you know if you get a ppo yes you may not have a gatekeeper and you could wind up walking into uh you know gi doctor's office cardiologist rheumatologist endocrinologist i mean you could walk in potentially make an appointment with all those people theoretically and the question is is that the best thing.

For you all the time a lot of times yes but sometimes no sometimes you probably want a primary care doctor to handle that because if you go i hate to use this analogy but you know if you go to midas what do you think they're going to tell you you need they're going to tell you you need a new muffler i mean.

It's not it's not like that in medicine but on some level it is too you know if you shop a lot of specialists unnecessarily you may get care or procedures that weren't necessarily right at that time so you have to understand if you're going to get a ppo you still need to have a.

Great relationship with a primary care doctor who can advise you when it's time to you know seek out a specialist it you know if you use a ppo as a carte blanche just to randomly you know go to different specialists um then you know that potentially then could be a downside of people then you.

Know you might be better off in an hmo if you can't find a relationship with a primary care doctor that has the whole picture that knows you and gets to know you you know this idea of unnecessary visits unnecessary tests is also not good so it's not all rosy for the.

Ppo side you know there's the there's the finances the deductibles and this sort of open access that a lot of different types of medical care which you may or may not need thanks for watching if you want me to clarify anything on hmo ppo or any other similar topics feel free to leave a comment below and if you like content like this.

Please like and subscribe and support our channel and as always be well and take care thanks for watching bye you

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