Preferred provider organizations. Implications of the fastest growing health care option

Preferred provider organizations (PPOs) are a new delivery arrangement that affords the consumer flexibility in choosing providers, while offering financial incentives to use preferred providers (both hospitals and physicians). These providers, who contract with a PPO, must agree to utilization review and usually accept a discounted charge as payment. Preferred providers do, however, benefit from an increased patient base and more rapid claims payment while remaining in the fee-for-service sector. The article examines this innovative delivery approach and discusses potential implications for primary care physicians.