Preferred Provider Organization


Health Economics

  • In the US a PPO differs from a health maintenance organization (HMO) in that (1) the providers are paid not by the prepaying subscriber as with an HMO but by an insurance company or employer on a fee-for-service basis, (2) patients are usually able to avail themselves of non-PPO providers, albeit with substantial copayments and (3) there is no primary care gatekeeper. PPOs can range from a single hospital and its practising physicians contracting with a large employer to a national network of physicians, hospitals and laboratories that contract with insurers or employer groups. PPO contracts typically provide discounts from standard fees, incentives for plan members to use the contracting providers, and other managed health care cost containment methods.
  • acronymPPO
    (written as preferred provider organization)