PPOs: forces which will determine their growth and future

PPOs are designed to promote competition among providers for the purpose of enhancing cost containment. Business and industry have demonstrated an active interest in PPOs and report savings as a consequence of purchasing health services for employees from these new alternative care organizations. To be effective in reducing the rate of escalation of personal health care expenditures will require demonstration to the business community that they are able to provide quality care at less cost. This will require a strong utilization review program and a need for providers to share some risk as an incentive to be cost efficient. Furthermore, any federal or state legislation or regulation should discourage overburdensome costs for PPOs to do business.