Questioning assumptions about preferred provider arrangements.

Abstract

The parties in any negotiation to contract for health care services delivered by a preferred provider organization (PPO) represent often divergent views and priorities. The assumptions of each participant in a PPO contracting process need to be thoroughly understood because of their impact on the subsequent business of providing, consuming, and paying for medical services. This article discusses 11 of the most common assumptions about PPOs made by providers, insurers, and purchasers. These assumptions have not been borne out to date by the experience of current PPOs and other alternative health care delivery systems.