The Effects of Preferred Provider Organizations on Costs And Utilization of Hysterectomy

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Executive SummaryAs preferred provider organizations (PPO's) attempt to expand their share of the insurance market, they have attempted to demonstrate their ability to achieve more appropriate levels of utilization and lower costs.This study examines the comparative utilization rates and costs associated with abdominal and vaginal hysterectomy in indemnity vs. PPO products.Historically, hysterectomies have been performed without clear indications at alarming rates, but more clear practice guidelines have emerged to control quality and utilization.The study revealed that PPOs achieved utilization rates for abdominal and vaginal hysterectomies that were 12% to 13% lower than indemnity plans with utilization review.Cost per claim between insurance products did not vary significantly, but the impact of lower utilization in the PPO plan clearly lowers overall care costs across the patient population.Numerous market dynamics play into the variability of pricing per procedure among insurance product in each area.

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