PPOs — A leading, proven, health care delivery model

PPOs have a number of common operational elements that account for their extraordinary success in today's health care market. Throughout the ‘80s and ‘90s, the "experts" continued to predict that PPOs were only an interim solution as fee-for-service business transitioned to managed care options.

But these "experts" misunderstood the consumer’s desire to take a more active role in their health care. PPOs proved their benefit to consumers by delivering exactly what consumers demanded; greater choice, access and flexibility in selecting providers and medical services. PPOs have continued to grow faster and serve a far-larger segment of the market than any other health care delivery system. Today, 69 percent of Americans having health insurance are enrolled in PPOs.

At the same time, PPOs have worked in collaboration with the medical community, respecting the sanctity of the doctor-patient relationship. Currently, more than 199 million individuals are enrolled in a PPO program.

AAPPO’s most recent Annual Market & Industry Trend Report reflected HMO benefit costs average $8,570 per employee. PPOs have been able to offer high-quality care for the average cost of $8,223 per employee. While the cost difference is slight, the market has clearly and consistently chosen PPOs due to the additional benefits the offer for the price — greater access and choice in a quality setting.

Several factors have fueled PPOs’ unprecedented growth and strong market share:

1. PPOs are extremely flexible in offering more choice in provider selection, including greater access to medical services in and out of network.
2. The PPO health care delivery model is distinct in separating provider quality mechanisms from provider reimbursement levels. As a result, there is a balance within a PPO model between the delivery and financing of medical care. This allows for the delivery of the most appropriate care, but not necessarily at the lowest cost.
3. AAPPO supports PPOs that offer quality oversight, thereby ensuring the delivery of the most appropriate care.
4. PPOs work collaboratively with providers to continually improve the quality of their products. The financial aspects of health care delivery do not override patient care decisions, but rather work in conjunction with PPO providers delivering patient care.