What characterizes a "preferred provider organization" (PPO)?

A preferred provider organization (PPO) is characterized by offering greater flexibility in selecting healthcare providers compared to other types of health plans. This flexibility allows members to see any doctor or specialist without requiring a referral, which is a common feature in many managed care plans. PPOs maintain a network of preferred providers who have agreed to provide services at reduced rates. While members can indeed choose to go outside of the network, doing so often results in higher out-of-pocket costs.

The defining feature of a PPO is its balance between managed care and consumer choice, making it appealing to individuals who value the ability to navigate their healthcare options with more freedom. This sets it apart from plans that may have stricter requirements, such as mandatory referrals or limitations on provider choices. In contrast, other types of plans might either require the use of a specific hospital or cover only certain types of services, highlighting the key advantages of PPOs in terms of access and choice.