Effects of Preferred Provider Organizations on Health Care Use and Costs: Pooled Cross-Sectional Time Series, First Quarter 1988 Through First Quarter 1990

This research project studied the effects of Preferred Provider Organizations (PPOs) on health care use and costs in comparison with indemnity health care plans and indemnity plans with utilization review (UR). The data cover nine quarters of a single insurer's claims experience with these types of health care plans. The unit of observation is the employer group covered by a given plan. Variables describing claims experience include number of claims, reimbursed costs after copayments and deductibles, hospital expenditures, number of hospital admissions, percent of claims in different diagnostic categories (surgery, tumors, births, and mental health), and number of tonsillectomy/adenoidectomy and colonoscopy cases. Reported characteristics of these groups include coinsurance rates, plan type, industry of employer, group mean age, percent of covered lives with dental or prescription drug coverage, and percent of covered lives that were women or dependents. In addition, the data contain variables describing the market in which each group was located, such as number of hospital beds in the city or county, number of hospitals and health maintenance organizations in the metropolitan statistical area, median rental cost for housing units in the city or county, percent of county or city that was Black or age 65 or older, number of nonfederal physicians in the county, and number of PPOs in the state.