What is the primary function of Preferred Provider Organizations (PPOs)?

The primary function of Preferred Provider Organizations (PPOs) is to offer services at prearranged discount prices. PPOs establish a network of healthcare providers, which can include doctors, hospitals, and other service entities, that agree to provide services to members at reduced rates. This arrangement benefits both the insurance company and the member. The insurance company can negotiate lower fees with healthcare providers, while members receive access to quality care at a lower cost than they would typically pay outside of the network.

The discount structure encourages members to use in-network providers, as this usually leads to lower out-of-pocket expenses for services. Additionally, while PPOs do allow some degree of flexibility for members to seek care from out-of-network providers, doing so often results in higher costs, further incentivizing the use of in-network services.

The other options do not reflect the primary purpose of PPOs. Imposing high fees is contrary to the discount structure they promote. Providing exclusive contracts to a select few providers is a feature of some healthcare plans, but not the primary aim of PPOs, which aim to offer broader access to providers. Coordinating specialized surgeries is a very narrow function and does not encompass the wide array of services that PPOs typically cover.