Patient satisfaction with PPOs driven down by administrative hassles

The latest health plan ratings by Consumer Reports shows PPO members less satisfied than those who belong to HMOs, primarily because of poor scores for PPOs' customer service and billing practices.

Overall, 64% of the 37,481 readers surveyed said they were "very" or "completely" satisfied with their health plans. That "lukewarm" score puts health insurers ahead of cable TV providers but behind pharmacies and real estate agents, according to the report. HMOs collectively were not rated against PPOs. However, HMOs scored higher than PPOs in individual factors such as out-of-pocket costs and customer service. The highest overall HMO score of 85 out of a possible 100 went to Group Health. The best-scoring PPO, WellPoint-owned Anthem Blue Cross and Blue Shield of Connecticut, earned an overall score of 82.

For example, 62% of PPO members reported having to call their plan about a bill or claim, while 27% of HMO members said they had done so.

"HMOs have generally worked through all the kinks in the last 15 years with customer service, and by their design there's actually less paperwork or hassle that a customer has to deal with -- rarely do you have to file a claim," said William Custer, PhD, professor of health administration at Georgia State University in Atlanta. "PPOs are really just traditional insurance. The only difference between them and indemnity insurance of the past is some limited panel, which generally is not that limited."

Custer did offer one caveat. He said it's important to note that the Consumer Reports survey is voluntary and unscientific, so is probably skewed by including people who are either very happy or very unhappy with their plan.

"People want to talk about something when they love it or hate it," he said.

PPOs also may be losing ground with members as costs rise so dramatically that people are more willing to forgo choice if it's offset by lower premiums, said Mandy Walker, a Consumer Reports senior project editor who worked on the health plan report.

"Health care costs are going up so extremely for our readers -- 8% for insurance premiums -- so it could be that with an HMO, people are realizing the lower costs make a real difference," she said.

The HMO members surveyed paid less in premiums and out-of-pocket costs than did PPO members. And unlike past surveys, HMO members' ability to get needed care was about even with PPOs.

American Medical Association President J. James Rohack, MD, a cardiologist who works for Scott & White Clinic in Temple, Texas, said patients could be coming to the conclusion that PPOs' hassles can outweigh the promise of choice of physicians. Scott & White operates its own HMO health plan, but the Clinic's patients are a mix of Scott & White HMO members and members of other plans, including PPOs.

If patients report dissatisfaction with their health plans, it's a safe bet that the plan also has poor relationships with doctors, Dr. Rohack said.

"One way to cut administrative costs is don't have as many people in the customer service department, don't have as many people in the provider relations department, don't have as many people in the claims department," he said. "If you make your administrative cost savings from that standpoint, lo and behold, when an issue comes up, if no one's dealing with it in a timely fashion, you've got unhappy customers and unhappy physicians."