HMOs "Save US Employers Money"

10 March 1997

Health maintenance organizations are the most cost-effective health carealternative generally available to US employers, costing them $3,125 per employee a year, or 4% under the $3,261 average for all employers polled by Business & Legal Reports' 1997 Survey of Employee Benefits. Preferred provider organizations were the next least expensive, averaging $3,235 per year.

Small employers seem to do equally well with Blue Cross/Blue Shield, HMOs and PPOs, while mid-sized employers gain the most with HMOs. Large employers do best with PPOs, but they save almost as much with HMOs and also do well with self-insurance, the costs of which seem to fall according to the organization's size.

Blue Cross/Blue Shield coverage remains competitive with both HMOs and PPOs, at $2,258 per employee per year. Commercial insurance is the most expensive, averaging $3,580 per head, with self-insurance not far behind at $3,999.

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