PPOs (Preferred Provider Organizations)

In 1980s, one of the most dramatic changes in the U.S. health care system was the emergence of preferred provider organizations (PPOs). Although the private actors in the field mainly led the PPO movement, the Health Management Organizations (HMOs) Act of 1973 certainly paved the way for PPOs. The act encouraged the establishment of HMOs as an alternative to the fee-for-service health care model prevailing at the time. HMOs were, as intended by the act, going to be responsible for providing a range of medical and health care services as needed to their subscribers for a fixed payment, paid either monthly or annually.

Both PPOs and HMOs are a form of managed care organization and follow a very similar template. Managed care represents a departure from ...