What does PPO stand for in the healthcare context?

In the healthcare context, PPO stands for Preferred Provider Organization. This type of managed care health plan provides a network of healthcare providers who have agreed to offer services at reduced rates to the insurance company and its members. One of the main advantages of a PPO is the flexibility it offers; members can choose to see any healthcare provider, but they will pay less out-of-pocket expenses if they use doctors or hospitals that are part of the PPO network.

This structure encourages members to utilize the preferred providers, fostering a balance between cost-efficiency for the insurance provider and choice for the insured. Unlike other plans, such as Health Maintenance Organizations (HMOs), which often require members to select a primary care physician and obtain referrals to see specialists, PPOs allow direct access to specialists within the network, making it a popular choice among individuals who value both choice and cost-sharing advantages.