Services and charges by PPO physicians for PPO and indemnity patients: An episode of care comparison

Abstract

Physicians who participate in preferred provider organizations (PPOs) usually agree to various types of utilization review and sometimes discount their charges or agree to accept lower fees. This study was performed to determine whether they provided more or fewer services to their PPO patients than to their indemnity patients and whether the discounting resulted in lower expenditures for each episode of illness. In 1984, Metropolitan Life offered PPO coverage to Dade County (Florida) school board employees and dependents but only a standard indemnity plan to Dade County government employees and dependents. Episodes of care were examined for patients with chest pain, hypertension, joint pain, gastrointestinal or liver disorders, and lower back pain cared for by physicians who treated patients in both the PPO and indemnity employee groups. For PPO patients, charges per physician service were the same or lower, but total physician charges during an episode were higher. For services such as laboratory tests, diagnostic x-rays, and room and board, PPO and indemnity patients’ charges were not significantly different. © Lippincott-Raven Publishers.