Health Economics Commons^™

Insurer Competitive Strategy And Enrollment In Newly Offered Preferred Provider Organizations (Ppo), Richard Hirth, Kyle Grazier, Michael Chernew, Edward Okeke

Edward Okeke

While early PPO growth coincided with growth of managed care generally, recent growth has come primarily at the expense of other managed care plans. Little is known about the micro behavior underlying these trends. In 2005, University of Michigan employees were offered PPOs for the first time by vendors who also offered other plans. PPOs helped the offering vendors maintain or grow their total enrollment share. PPOs were most attractive to workers who had previously chosen less managed plans. Because PPOs drew few enrollees from HMOs, there was little evidence of a backlash against managed care in the context of …