What does PPO stand for in healthcare?

In healthcare, PPO stands for Preferred Provider Organization. This term refers to a type of managed care organization that offers a network of healthcare providers, such as doctors and hospitals, that have agreed to provide services at pre-negotiated rates. Patients who are enrolled in a PPO plan generally have the flexibility to choose their healthcare providers, allowing them to either go within the network for lower costs or outside of the network for higher costs.

The preferred provider aspect means that the organization has established relationships with specific providers, which helps to control costs while ensuring a certain quality of care. This model encourages patients to seek care within the network by providing incentives such as lower co-pays and deductibles when services are rendered by network providers. Consequently, PPOs are popular among individuals who desire greater flexibility in their healthcare choices while also seeking to manage their healthcare costs effectively.