What component does a PPO emphasize?

A Preferred Provider Organization (PPO) emphasizes preferred provider networks as its primary component. This structure allows patients greater flexibility in choosing healthcare providers. A PPO contracts with a network of medical providers who offer services to plan members at reduced costs. These "preferred" providers agree to lower their fees and provide a more significant range of services to improve access to care for patients within the network.

Members of a PPO can seek care from any provider; however, if they choose to use a provider outside of the network, they typically face higher out-of-pocket costs. The establishment of a network is fundamental to the operation of PPOs, as it helps to manage costs while providing members with options regarding their healthcare. This focus on a network of preferred providers is a hallmark feature of PPOs that distinguishes them from other types of health plans.