Which of the Following Is a Characteristic of Preferred Provider

question 80

Multiple Choice

Which of the following is a characteristic of preferred provider organizations (PPOs) ?

• A)They contract with employees instead of employers.
• B)They do not make contracts with insurance companies.
• C)They provide benefits on a prepaid basis.
• D)Employees often are required to use the preferred providers.
• E)Employers may give incentives for employees to choose a participating physician.

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Definitions:

Implicit Costs

The opportunity costs of using resources that a firm already owns, rather than the expenses directly paid out.

Explicit Costs

Direct, out-of-pocket expenses incurred by a firm or individual for business operations or activities.

Accounting Profits

The financial gain calculated by subtracting total explicit costs from total revenues, using generally accepted accounting principles.

Economic Profits

Profits calculated by subtracting both explicit and implicit costs from total revenues; also known as supernormal profits.