Are PPOs Evil, and if So, Are They the Necessary Kind?

Steve Neidlinger, CAE

I’m going to lead off with a hot take that may raise the ire of many readers: PPOs are doing what they were intended to do. I know that Preferred Provider Organization (PPO) is the most recognized nomenclature for the industry, but I prefer Managed Care Organization (MCO), because that is the primary purpose for which they were founded: to manage care. Although I contend that corporate interests have cause priority shifts over the years, MCOs were founded to make dental care decisions for the benefit of their subscribers, and they do so without ever having seen the patient.

It’s a ridiculous concept, but understandable when you consider their goal. They want to arrange the care that you provide to make it more affordable. One of the primary cost drivers for any medical care is the expansion of services that practitioners can provide. Surgical care was likely much cheaper in Civil War days, when all a battlefield surgeon needed was a saw and a stick to bite down on. But with the advent of radiology, anesthesia, and modern techniques, surgical care is both more thorough and effective, but more expensive. One of the ways that someone can save on that expense is to restrict care options to those that may not be the most effective but are likely the most cost effective.

If that means second guessing your first-hand observations about the most effective treatment plan, that is acceptable to the MCO. And if it saves your patient a large out-of-pocket cost, it’s likely acceptable to the patient, too. From the MCO’s perspective, they are doing what they were put on this earth to do.

The PPO with which you are negotiating has more money to spend. They aren’t held to the same antitrust rules that you are. They operate within a system that is infinitely convoluted. All of this puts you at a disadvantage in your negotiations. But you have an advantage: You are a dentist. You have the skills and ability that a MCO needs to fulfill their function. Without you and your colleagues, they cannot operate.

So what can PAGD or AGD do to aid you in fighting the good fight? One is advocate. There are practices by MCOs that are designed to create leverage in their negotiations with you while providing no benefit to the subscriber. When these practices restrict the people you serve, it’s important that our elected officials are made aware and get involved.

The second is provide you the knowledge to effectively negotiate. I once heard a baseball executive say that the key to being effective in their job was to never be put in a position where they are forced to act because that automatically puts you at a disadvantage. Having the leverage to pick and choose your networks is key, and I hope this edition of KE gives you the tools to start that process.

The third is connect you with experts. Of all the classes you took in dental school, I’m certain that one of them was not MCO negotiation. There are professionals who can analyze your book of business and recommend ways that you can maneuver to ensure that you can pay your staff and keep your lights on.

PPOs are not the enemy. To cast them as such puts you at a disservice in negotiations because it blinds you to what drives them. They are no more the enemy than someone trying to sell you a car. They are an option for getting patients in your chair, and if you can go into negotiations knowing what you can do, and knowing what they can offer, you may not come out of it as friends, but can do so as two parties that both got what they want.

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