Question

There is a trend taking place in managed care whereby PPOs are gaining momentum while HMOs are losing, explain this phenomenon. Competition is alive and well and of course that’s what gives this land the edge in so many ways. Now I would like for you to take up the following arguments and explain: Should competition be regulated by the feds? Why and why not, after all it has been proven that competition regulates costs, is this true or not? It has been said that the advent of the ACA is to regulate costs while promoting competition and regulate the market through exchanges, how do you understand that to be? Explain.

Answer 1

1. PPO is preferred provider organization while HMO is Health maintenance organization. In HMO, every patient has a primary physician. All the queries, diagnosis and medical services of that patient, go through that particular physician. This actually complicates the process and delays treatment to patients. PPO on the other hand, has considerable flexibility. There is no dependency on a particular physician. The patient can himself approach a specialist, based on the ailment. This facilitates diagnosis and speeds up the overall treatment process. Hence people are preferring PPO over HMO.

2. Competition is important in any sector or industry. It gives a momentum to the companies to strive hard and make a mark for themselves. Companies evolve, work on their weaknesses, so as to have a better standing in the market. Same is the case with individuals. Hence in my views, competition is a necessary evil which facilitates the evolution and improvement of any entity. Regulating competition will be like creating a roadblock in the path of improvement, which is not correct. So I feel that competition must not be regulated. However entities, companies as well as individuals must believe in maintaining a healthy competition and not a toxic one.