The Savannah Business Group on Health, which provides network contracting services to self-funded PPOs, expects a 2% increase in hospital and physician costs in 2009, the same increase as in 2008, according to Gary Rost, executive director. Rost said that the group’s long-term relationship with local providers enables it to negotiate favorable contract terms. The group’s PPO network serves 15,000 lives among 20 different employers, each of which contracts separately for TPA services.
Maybe the Savannah Business Group is onto something here.
Rost notes that direct contracting programs work best in a smaller communities because a critical mass of membership is needed. The Savannah Business Group’s PPO membership accounts for more than 10% of the local commercial market, Rost said. It also helps to have a lot of locally headquartered companies.
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