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Pharmacy preferred-provider organizations.
American Journal of Hospital Pharmacy
|August 1, 1987
Summary
Pharmacy preferred-provider organizations (PPOs) manage costs through formularies and audits. As the industry matures, expect evolving financing and stricter quality standards for these pharmacy networks.
Area of Science:
- Health Services Research
- Pharmaceutical Economics
- Managed Care Organizations
Background:
- Pharmacy preferred-provider organizations (PPOs) are increasingly common in healthcare.
- Understanding their structure, sponsorship, and cost-containment strategies is crucial for stakeholders.
Purpose of the Study:
- To describe the structure, features, and evolution of pharmacy PPOs.
- To analyze different sponsorship models and their implications.
- To outline cost-containment mechanisms and future industry trends.
Main Methods:
- Descriptive analysis of pharmacy PPO structures and functions.
- Review of cost-management strategies employed by pharmacy PPOs.
- Discussion of industry evolution and future financing models.
Main Results:
- Pharmacy PPOs can be sponsored by insurers, employers, providers, or independents, with insurer and provider sponsorship being most common.
- Cost containment is achieved through formularies, utilization review, and audits.
- Pharmacies benefit from increased patronage, protected market share, and improved cash flow.
Conclusions:
- Pharmacy PPO financing is evolving towards risk-based contracting.
- Increased competition and credentialing will likely lead to enhanced quality-of-care and performance standards.
- Choosing a pharmacy PPO requires careful consideration of financial health, claims processing, and long-term goals.