New Blue Cross PPO available to small businesses
Blue Cross Blue Shield of Michigan is introducing a new preferred provider organization health plan that the insurance provider says will lower health care costs for businesses and offer better care for employees.
Small and mid-sized employers can enroll in the Blue Cross Personal Choice PPO in October. The program uses organized systems of care that give employees access to a broad range of doctors and ultimately lowers the cost of coverage by building on former Blue Cross models, the insurer said.
“It’s like getting a car with better gas mileage,” Andrew Hetzel, vice president of corporate communications for Blue Cross, said in an interview with The Detroit News. “It becomes a more affordable car to own because you spend less on gas. If the health care system is more efficient in delivering care, then it becomes less costly, and that cost savings is passed on to insurance customers in the form of more affordable premiums.”
John Dunn, vice president for middle and small group business at Blue Cross, expects about 10 percent of around 30,000 small businesses will sign up for the new plan in the next three years. He said, on average, it will save employers about 5 percent to 9 percent a year. Blue Cross initially is targeting companies with up to 50 employees, Dunn said.
For a consumer, a PPO typically is a more expensive insurance plan that offers increased flexibility when choosing a doctor, hospital or specialist. For comparison, a health maintenance organization, or HMO, typically costs the employee less in deductibles and premiums, but requires a primary care physician to determine what care is needed and refer a patient to specialists, such as dermatologists.
Hetzel said the new plan design is a “much more efficient delivery model” that helps customers — small businesses in this case — afford to offer a PPO.
The plan divides doctors in levels within the organized systems. Level one physicians have “demonstrated better efficiency managing care, and therefore a lower cost,” Dunn said. Employees would be encouraged by lower deductibles to go to the level one doctors, hospitals or specialists within the preferred plan.
Members could receive care from any level one doctor, specialist or hospital without a referral. With a referral from a primary care physician, a member could go to any other doctor outside of the level one tier within the Blue Cross PPO network, which includes 38 organized systems with 4,300 primary care doctors, 11,630 specialists and 118 hospitals.
While HMOs don’t cover out-of-network care, the Blue Cross PPO offers a broad range of doctors that ultimately fall under the level one or level two categories.
“The new plan drives the member into a very efficient, lower cost health care delivery system within our big PPO, and it enables the member to take advantage of the broad access that a PPO delivers,” Hetzel said. “It’s an answer to the affordability concerns employers in Michigan have about PPO plans.”
The new PPO brings specialists into the system, Hetzel said, which creates an organized system of care that “is among the nation’s largest.”
Blue Cross also hopes to cut costs by streamlining communication with the organized system. Now, doctors can send X-rays to the hospital if needed and specialists can send test results to primary care physicians through an infrastructure designed to eliminate redundancies and keep time spent with a doctor to a minimum.
The quicker a patient is out of the system, the less they cost to insure, Hetzel said.
Hetzel and Dunn said the new plan is exciting because it seems to meet the needs of the provider, the employer and the employee.
“Our customers want to give their employees access to the broadest possible number of hospitals and physicians at an affordable price,” Hetzel said. “That’s what we’re delivering.”