"For many employers, managed-care plans offer the best chance to control costs over time," says John Erb, one of the study's authors. "However, the survey underscores that all managed-care programs are not alike, and not all programs save employers money."
In Los Angeles and San Francisco, benefit-rich PPOs actually cost far more than traditional plans. (See the chart above.) Among 12 cities highlighted by the survey, PPOs also cost more than traditional plans in Cleveland, Houston, Minneapolis/St Paul, Richmond, and Seattle. But PPOs in Chicago, Dallas/Fort Worth, and Philadelphia had significantly lower costs than traditional plans. The survey also found that HMOs now cover only 23 percent of employees, and PPOs cover only 17 percent.
"Considering that managed care has been strongly promoted for 10 years, these numbers are low," says Erb. "It partly reflects the mixed cost management results employers have experienced, and the fact that it takes time to move employees into a managed-care environment."
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