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How to Choose the Right HMO Thats Right for Your Company

Aug 17, 2007
When you hire someone to provide a service for your company over a long period of time, you will usually keep tabs on the service being provided and those providing it, to ensure that you are getting the best quality for your money. Yet, with HMOs, many companies sign the contract and leave it at that.

Providing health care for your employees is a big expense, and the costs are only increasing. You have to be prepared to research which HMO is best for you, and to make sure that the level of quality does not fall over time.

The first step is to consult the Health Plan Employer Data Information Set (HEDIS) provided by the National Committee on Quality Assurance (NCQA). The HEDIS provides an exhaustive comparison of HMOs, with nearly 60 categories of performance evaluation. Virtually all respectable HMOs participate in HEDIS, an HMO that does not is likely not the best choice.

The HMO you choose should be appropriately accredited, either by the NCQA or the Joint Commission on Accreditation of Health Care Organizations. Most HMOs are able to meet the high standards of these organizations, so be extremely weary of those that don't.

When comparing the performance of your potential HMOs there are a number of things to look at. Disenrollment is one: A high rate of disenrollment, or a steadily increasing rate, indicates customers are not happy with the services they are receiving. The HMOs medical-loss ratio is also worth looking at. This is the ratio of medical expenses to premiums collected. A low ratio indicates an HMO that is not spending its money wisely. A sudden decrease in the ratio may indicate a change in financial priorities for the HMO and could be indicative of bigger problems. A sudden increase could be indicative of a lot of unexpected expenses for the HMO, and could predict financial troubles in the near future.

Find out the specifics of what your HMO is offering you. Many services, such as Cholesterol screening and certain immunizations are not offered by every HMO. If you prefer alternative therapies will the HMO cover them?

How many doctors are available through the HMO? When your employees require a physician, how much choice will they have? Will they be able to keep their current physician? Will they have to drive 100 miles to find a general practitioner covered by the HMO that is taking new patients? These are the questions you have to ask of every HMO you are considering.

Also look at the HMOs references. No matter how great an HMO looks on paper, if its previous customers have only negative things to say about it, it is probably not for you.

If you want to be absolutely certain that you are making the right choice, you could also hire a healthcare consultant to instruct you, or your managers, how to properly assess the merits and flaws of HMOs. This service will likely set you back $5000 or more, but choosing An HMO for your company is one of the most important decisions you will make, and you want to be absolutely certain that you are making the right choice.
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