Use of ambulatory health care services in a preferred provider organization

The organization of the delivery of health care can have significant cost-saving implications, but few of the available studies have made adequate comparisons of costs across plans. Furthermore, new organizational types such as independent practice associations and preferred provider organizations have not yet been studied in detail. This paper examines ambulatory utilization in a preferred provider organization (PPO) for Uniformed Services beneficiaries at Pacific Medical Center (PMC) in Seattle. The utilization in the PPO is compared with the results of a recently reported study of three other organizationally different Seattle plans: a Blue Cross/Blue Shield plan (BC), a closed-panel health maintenance organization (HMO), and an independent practice association (IPA). The PPO was similar to the IPA and the HMO in having a high percent of patients with any ambulatory use and had standardized ambulatory costs per user which were lower than BC but higher than the HMO. Thus, this particular type of PPO may have cost-saving features, particularly because the Uniformed Services population is known to use more health services than the general population. Methodological issues for future utilization research across organizations are also discussed.