The impact of preferred provider organizations

The development of preferred provider organizations (PPO) is of special interest to physicians because of the strengths of this form of medical services organization. Given the threats and opportunities in the health care environment, the PPO concept will evolve and impact both positively and negatively on physicians' practices. Specific impacts are predicted in the areas of product and service offering design, the type and number of partners in PPOs, the pricing models for medical services, promotional opportunities, and the change in the nature and extent of distribution of health care services. Examples of the evolution of the PPO concept and a short case history are included.