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Employer perspectives on the preferred provider organization concept
Hospital & Health Services Administration
|June 9, 1984
Summary
Employers are interested in Preferred Provider Organizations (PPOs) as a strategy to control healthcare costs. Most firms surveyed support the PPO concept, viewing it as a way to maintain care quality and provider access.
Area of Science:
- Healthcare Management
- Health Economics
- Health Services Research
Background:
- Preferred Provider Organizations (PPOs) aim to reduce healthcare costs by contracting with cost-effective providers.
- Employer demand for PPOs as a health plan option is not well-documented.
- PPOs are believed to offer cost containment while preserving patient choice of providers.
Purpose of the Study:
- To assess employer attitudes towards offering Preferred Provider Organizations (PPOs).
- To understand employer perceptions of PPOs' role in cost containment and quality of care.
- To identify market opportunities for PPO plan adoption.
Main Methods:
- A survey was conducted among companies in the Minneapolis metropolitan area.
- The survey focused on employers' views and experiences with healthcare plans, including PPOs.
- Data on employer concerns regarding healthcare costs and plan options were collected.
Main Results:
- Healthcare costs are a primary concern for all surveyed firms.
- Most employers are self-insured and offer multiple health plan choices, including Health Maintenance Organizations (HMOs).
- Employers view PPOs as a component of a broader cost-reduction strategy, balancing savings with quality and access.
Conclusions:
- Despite some skepticism about savings and administrative concerns, most employers support the PPO concept.
- The most promising market for PPOs is as an addition to existing indemnity plans, offering incentives for using preferred providers.
- PPOs are seen as a valuable tool for employers seeking to manage healthcare expenditures while maintaining provider choice and quality.