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PPOs: the employer perspective.

T Rice1, J Gabel, G de Lissovoy

  • 1University of North Carolina, Chapel Hill.

Journal of Health Politics, Policy and Law
|January 1, 1989
PubMed
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A 1987 national survey found that 11% of employees were enrolled in preferred provider organizations (PPOs). Employers reported mild cost savings and high satisfaction with PPOs, contrasting with criticism of HMOs.

Area of Science:

  • Health Services Research
  • Health Economics
  • Employee Benefits

Background:

  • Preferred Provider Organizations (PPOs) emerged as a significant managed care option for employers.
  • Understanding employer experiences with PPOs is crucial for evaluating their impact on healthcare delivery and costs.

Purpose of the Study:

  • To assess employer experiences with Preferred Provider Organizations (PPOs) in 1987.
  • To examine the prevalence, cost impact, and satisfaction levels associated with PPOs.
  • To compare employer satisfaction with PPOs versus Health Maintenance Organizations (HMOs).

Main Methods:

  • Conducted a national survey of nearly 700 employee benefit managers via telephone interviews in 1987.
  • Collected data on employee enrollment in PPOs and employer perceptions.

Related Experiment Videos

  • Analyzed the impact of PPOs on health insurance premiums and employer satisfaction.
  • Main Results:

    • 11% of employees were enrolled in PPOs nationwide in 1987.
    • PPO market share varied regionally, with a strong presence in the West (nearly one-third of employees) but minimal presence in the East (1%).
    • PPOs showed mild cost savings compared to conventional insurance, and employers expressed high satisfaction with PPOs, while being critical of HMOs.

    Conclusions:

    • PPOs had established a significant presence across employers of all sizes by 1987.
    • Employers perceived PPOs as offering moderate cost benefits and high satisfaction.
    • Findings suggest a preference for PPOs over HMOs among employers surveyed in 1987.