Research on the effects of Preferred Provider Organizations (PPOs) on health care use and costs

The Foundation's Changes in Health Care Financing and Organization program was designed to support research, demonstration, and evaluation projects examining major changes in health care financing.This is a research project to evaluate the effectiveness of Preferred Provider Organizations (PPOs) as a strategy for controlling utilization and costs. Using claims data for 1988-1990 from a national managed care company covering thousands of employers and several PPOs, the investigators will study three aspects of PPOs: (1) the overall effects of PPOs on health care use and costs; (2) the cost management activities associated with PPO cost savings; and (3) the effects of PPOs on patterns of care and specific medical procedures. The objective of the project will be to provide public and private policymakers with solid information about the cost-effectiveness of PPOs and, if shown to be cost-effective, which components of their design and which activities are associated with cost savings.

Grant Details

Amount Awarded $200,185.00

Awarded on: 4/16/1992

Time frame: 6/1/1992 - 5/31/1995

Grant Number: 20040


University of Michigan Institute for Social Research

426 Thompson Street
P.O. Box 1248
Ann Arbor, 48106-1248


Dean G. Smith
Project Director