a characteristic of a preferred provider organizations (ppo) is
Preferred provider organization A preferred provider organization[1] is a subscription-based medical care arrangement. A membership allows a substantial discount below the regularly charged rates of the designated professionals partnered with the organization. Preferred provider organizations themselves earn money by charging an access fee to the insurance company for the use of their network (unlike the usual insurance with premiums and corresponding payments paid either in full or partially by the insurance provider to the medical doctor). They negotiate with providers to set fee schedules, and handle disputes between insurers and providers. PPOs can also contract with one another to strengthen their position in certain geographic areas without forming new relationships directly with providers. This will be mutually beneficial in theory, as be billed at a reduced rate when its insureds utilize the services of the "preferred" provider and the provider will see an increase in its business as almost all insureds in the organization will use only providers who are members. PPOs have gained popularity because, although they tend to have slightly higher premiums than HMOs and other more restrictive plans, they offer patients more flexibility overall.[2]
United States Postal Service Furthermore, some economists have argued that because public enterprises may pursue objectives different than profit maximization, they might have more of an incentive than profit-maximizing firms to behave anticompetitively through policies such as predatory pricing, misstating costs, and creating barriers to entry.[111] To resolve those issues, one economist proposes a cost-allocation model that would determine the optimal allocation of USPS's common costs by finding the share of costs that would maximize USPS profits from its competitive products.[112] Postal regulators could use such a cost model to ensure that the Postal Service is not abusing its statutory monopoly by subsidizing price cuts in competitive product markets with revenue obtained from the monopolized market.[113]