Operational and legal implications of preferred provider organizations

The healthcare marketplace of the 1980s is competitive. Federal policymakers, private insurers, and businesses have formulated innovative ways to increase price competition within the healthcare sector. The 1980s have been characterized by a shift from a regulatory emphasis to one including both regulation and competition in an effort to contain healthcare costs. This article examines preferred provider organizations (PPOs) and differentiates them from health maintenance organizations (HMOs) and exclusive provider organizations (EPOs). It also reviews alternate PPO models and discusses operational and legal implications.