PPO Industry Calls For Increased Collaboration Among Non-Traditional Allies

Main Category: Public Health
Article Date: 14 May 2008 - 1:00 PDT

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Collaboration among a broad set of industry stakeholders is vital to tackling many of the largest issues facing the health care and preferred provider organization (PPO) industries, according to a report released by the American Association of Preferred Provider Organizations (AAPPO).

The annual report, Outlook Connect - 2008 Market & Industry Trend Report, found that while competition, consolidation and consumerism are trends that continue to be prominent in the PPO industry, the focus in the next several years needs to be on collaboration. The report is based on interviews with key industry stakeholders as well as data from AAPPO's research partner, Mercer.

"Our report found that stakeholders believe the PPO industry is at a pivotal point where issues demand profound and potentially uncomfortable solutions - and that these solutions require us to work with nontraditional allies in order to improve the flow of needed information among preferred provider networks, payers and providers in order to improve the health care experience for all consumers," said Karen Greenrose, CEO and president of AAPPO. "I am proud of the work AAPPO has accomplished to forge relationships with groups like the American Medical Association, and believe similar collaborations will only benefit consumers and the health care industry as a whole."

Key findings from the report include:

- Politics, both at the state and national level, will have a significant impact on the PPO industry in 2008. The presidential election will continue to shine a spotlight on national health care policy, while increased activity in state legislatures to reform health care will require the industry to be even more politically active, especially in regard to the AMA model act reforming PPO contracting.

- Technology continues to offer the most promise, as well as the most frustration in the PPO industry. While PPOs are identifying innovative ways to implement technology and health IT solutions, lack of adoption of technology by physicians and other industry stakeholders stymies the full benefits technology could reap.

- Disease management and wellness programs will remain popular as more research emerges highlighting the benefits - both health and financial - of preventing chronic diseases versus providing long-term treatment.

- Enrollment in PPOs held steady in 2007, with 61 percent of all covered employees enrolled in PPOs. Enrollment in PPO-based consumer directed health plans (CDHPs) rose to 5 percent in 2007 from 3 percent in 2006.

- More employers are using incentives to encourage employees to participate in health management programs, such as health risk assessments and behavior modification programs. The use of incentives rose significantly among large employers in 2007 - 23 percent up from 13 percent in 2005.

- Large employers (those with over 10,000 employees) plan to utilize new strategies for cost management over the next five years. Eighty-one percent are interested in pursuing evidence-based design strategies, and 63 percent are interested in pursuing the creation of personal health records.

"PPOs are chosen by more than 165 million Americans, which represents nearly 67 percent of all insured Americans," said Allen Karp, AAPPO chairman and vice president for Health Care Delivery for Aetna . "The popularity of PPOs, we believe, is due to our industry's dedication to preserving the hallmarks of the PPO delivery system for consumers and employers - choice, quality and flexibility."

About the American Association of Preferred Provider Organizations (AAPPO)

Founded in 1983, AAPPO is the leading national association of preferred provider organizations (PPOs). PPOs put control for medical decisions in the hands of the physician and patient, resulting in easy access to the right care, provided by the right doctor, at the right time. AAPPO creates a forum for discussion and dissemination of PPO best practices.

American Association of Preferred Provider Organizations