Question

What are $(a)$ preferred provider organizations and $(b)$ health maintenance organizations? In your answer, explain how each is designed to alleviate the overconsumption of health care.

Name: Problem 15, Chapter 21: Economics Principles, Problems, and Policies
Uploaded: 2020-06-11T05:28:05-08:00
Duration: 4 min 9 s
Channel: Alejandro Ruiz
Description: What are (a) preferred provider organizations and (b) health maintenance organizations? In your answer, explain how each is designed to alleviate the overconsumption of health care.

   What are $(a)$ preferred provider organizations and $(b)$ health maintenance organizations? In your answer, explain how each is designed to alleviate the overconsumption of health care.

Economics Principles, Problems, and Policies

Campbell R.… 18th Edition

Chapter 21, Problem 15

Instant Answer

Solved by Expert Alejandro Ruiz

06/11/2020

Step 1

PPOs are a group of doctors or hospitals that have agreed to provide health services at discounted prices from the insurance plan. This means that the cost of health services is lower for those who are part of the PPO. HMOs, on the other hand, are Show more…

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What are $(a)$ preferred provider organizations and $(b)$ health maintenance organizations? In your answer, explain how each is designed to alleviate the overconsumption of health care.

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Key Concepts

Health Maintenance Organizations

Health Maintenance Organizations (HMOs) are another form of managed care that require members to select a primary care physician who acts as a gatekeeper for all medical services, including specialist referrals. This structure promotes coordinated, preventive care and helps control overutilization by ensuring that all care is appropriately managed and that unnecessary or redundant treatments are minimized.

Preferred Provider Organizations

Preferred Provider Organizations (PPOs) are a type of managed care plan that contracts with a network of health care providers to offer services at reduced rates. By offering negotiated costs and typically lower out-of-pocket expenses when patients receive care from in-network providers, PPOs create an economic incentive for patients to choose more cost-effective providers, indirectly curbing unnecessary or overly aggressive health care utilization.

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