A physician-hospital organization (PHO) is a network of physicians that have contracted with several hospitals in a given locality in order to combine administrative duties. A PHO streamlines the healthcare delivery process by presenting patients with a single organization capable of providing healthcare, managing administrative and payment processes, and monitoring the credentials of networked physicians. Often, PHOs utilize management services organizations (MSOs) to aid in making decisions related to hospital financial obligations or patient-physician administration. MSOs are independent of the Physician-Hospital Organization network and routinely compensated for their duties with a portion of the overall PHO revenues.
The large private sector health insurance market in the United States frequently makes locating a steady stream of patients difficult for individual physicians. The Physician-Hospital Organization offers an opportunity for physicians to group together and increase their bargaining power relative to larger healthcare providers. The Physician-Hospital Organization must compete with Health Maintenance Organizations (HMOs) and other large-scale healthcare providers that are frequently contracted with local hospitals in order to provide lower monthly premiums to consumers. Small PHOs often cannot match the pricing thresholds for many of the procedures covered under a HMO. Consequently, PHOs attempt to increase their network membership to the point where they can provide healthcare to subscribers at similar prices.
Employees who are dissatisfied with their present employer's health insurance coverage should inquire with their human resources departments regarding any local Physician-Hospital Organization. PHOs often attempt to contract with various employers for the same reason that larger HMOs do: employers provide steady access to patients, as well as revenue in the form of monthly premiums or subscriber fees. Employers are beginning to contract with Physician-Hospital Organizations more regularly, simply because PHOs are able to complete many of the health administration duties formerly handled by employer personnel. Employers are then free to drop their former health coverage plans. This can potentially save employers a great deal in annual insurance premiums.
Prior to enrolling with a Physician-Hospital Organization, potential subscribers should investigate the organization thoroughly. When was the network established? Which hospitals and doctors are covered within the network? What are their specialties, and which employee health conditions are covered (or not covered) by the given plans? Due to the fact that many smaller PHOs cannot offer the same range of medical services or price thresholds as a larger healthcare provider, employees are advised to acquire as much information as possible regarding PHO operations, healthcare delivery, payment processes, and coverage for individual health conditions.