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PPO or MPN Network Where Paying More Is Goal


PPO or MPN Network vs Supply and Demand

A PPO or MPN network where paying more remains the goal? This article is related to yesterday’s post on Obamacare and medical treatment rationing.

Picture Of Nurse Taking Patient BP MPN Network And Pulse

A phone call from one of our long-term readers basically said that I was crazy to think that Workers Comp payors would ever pay MORE for Workers Comp treatment than the fee-scheduled amount.

As I mentioned yesterday, the basic economic model says that if the supply of something stays the same, but the demand increases prices will increase.  The model has been in existence for over 300+ years.  The model has been proven as accurate again and again over that span of time.

However, the basic economic model (by Adams) did not count on any governmental interference in the marketplace.  The basic idea of rationing comes into effect when the government tries to keep prices in check by some type of price-adjusting plan.

The effect of price ceilings – which is the basic effect of Obamacare – is basically rationing.   This is a great explanation using gasoline prices on how the government holding prices down would create a shortage.  Some of us are old enough to remember the gas lines of the 1970’s.   The PDF file may take some time to load.  It is worth the read.

If healthcare prices are to be tamped down from the actual market, then the natural result will be rationing.  The PDF indicates that one of the ways to work around shortages is a grey or black market where the same service will have a much higher price.

Obamacare MPN Network Logo
Wikimedia Commons – Obama

The going rate for medical network reductions is 15%.  What if to have your injured workers seen timely you were willing to pay an extra 15%?   Page 2 of the PDF points out that the seller, (medical provider) will get to choose whomever they will provide the service to overall.  They would likely be the ones that are willing to pay the most.

The PPO effect of volume causing a discount in price would be thrown out the window as now the medical providers do not need the volume.  Why would they take a 15% hit if the medical providers are going to not need any additional volume?

The 30%  turn in additional medical costs would be staggering as 60% of Workers Compensation claim dollars are now being spent on medical.

This may not all come to fruition.  Medical treatment rationing may never become a reality.  However, if you are a risk manager, business owner, or medical provider, this is something that has to be part of your 5 – 7 year plan.

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James J Moore - Workers Comp Expert

Raleigh, NC, United States

About The Author...

James founded a Workers’ Compensation consulting firm, J&L Risk Management Consultants, Inc. in 1996. J&L’s mission is to reduce our clients’ Workers Compensation premiums by using time-tested techniques. J&L’s claims, premium, reserve and Experience Mod reviews have saved employers over $9.8 million in earned premiums over the last three years. J&L has saved numerous companies from bankruptcy proceedings as a result of insurance overpayments.

James has over 27 years of experience in insurance claims, audit, and underwriting, specializing in Workers’ Compensation. He has supervised, and managed the administration of Workers’ Compensation claims, and underwriting in over 45 states. His professional experience includes being the Director of Risk Management for the North Carolina School Boards Association. He created a very successful Workers’ Compensation Injury Rehabilitation Unit for school personnel.

James’s educational background, which centered on computer technology, culminated in earning a Masters of Business Administration (MBA); an Associate in Claims designation (AIC); and an Associate in Risk Management designation (ARM). He is a Chartered Financial Consultant (ChFC) and a licensed financial advisor. The NC Department of Insurance has certified him as an insurance instructor. He also possesses a Bachelors’ Degree in Actuarial Science.

LexisNexis has twice recognized his blog as one of the Top 25 Blogs on Workers’ Compensation. J&L has been listed in AM Best’s Preferred Providers Directory for Insurance Experts – Workers Compensation for over eight years. He recently won the prestigious Baucom Shine Lifetime Achievement Award for his volunteer contributions to the area of risk management and safety. James was recently named as an instructor for the prestigious Insurance Academy.

James is on the Board of Directors and Treasurer of the North Carolina Mid-State Safety Council. He has published two manuals on Workers’ Compensation and three different claims processing manuals. He has also written and has been quoted in numerous articles on reducing Workers’ Compensation costs for public and private employers. James publishes a weekly newsletter with 7,000 readers.

He currently possess press credentials and am invited to various national Workers Compensation conferences as a reporter.

James’s articles or interviews on Workers’ Compensation have appeared in the following publications or websites:

  • Risk and Insurance Management Society (RIMS)
  • Entrepreneur Magazine
  • Bloomberg Business News
  • WorkCompCentral.com
  • Claims Magazine
  • Risk & Insurance Magazine
  • Insurance Journal
  • Workers Compensation.com
  • LinkedIn, Twitter, Facebook and other social media sites
  • Various trade publications


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