Preferred-Provider Networks and Health Cooperatives (health co-ops)

Preferred-Provider Organizations (PPOs) are a variant of health service coverage that is largely used in the western world. They are usually privately run organizations that group individuals under a list of preferred providers and can therefore provide better prices for its members with the option of using services outside of these selected preferred providers but at higher prices.

Health co-ops are usually non-profit organizations that service a group of people that own and manage their organizations through an electoral process. A health co-op pools purchasing power of its members in order to negotiate more affordable prices for them.

What is proposed through the first building block of this proposed structure is a component of preferred-provider network that mainly targets the uninsured Egyptians, providing them with a simple, “smart” financing scheme that maximizes purchasing power for more affordable access to services through:

i. Grouping individuals and families belonging to specific communities around common lists of preferred healthcare service providers of their own, collectively agreed upon, choices.

ii. Negotiating considerably reduced fixed service prices and mass-contracting with the chosen providers.

iii. Enabling changes in preferred providers, updating quality of services, offering additional health maintenance services that target these communities including micro-insurance schemes as detailed later in this paper.

These networks are to be created through civil society initiatives with the aim of providing more affordable services, more consumer choice, better documentation of community clinical needs, sustainable income for local healthcare providers, patient-centered quality of care and more efficient market dynamics directed towards better customer satisfaction and reduced out-of-pocket spending incurred by individuals and families.

They also provide a strong foundation for the implementation of community micro-insurance schemes with a more complex financial structure.


E. Morelli, G.A. Onnis, W.L. Ammann, C. Sutter (Eds), Micro insurance – An Innovative tool for risk and disaster management, Global Risk Form GRF Davos, Davos, 2010

The Ottawa Charter: Health promotion, 1st International conference on Health promotion, Ottawa, World Health Organization,1986

D. Dror, C. Jacquier, Micro-insurance: Extending health insurance to the excluded, International Social Security Review, 2001, P. 15

The Bamako Initiative, Women’s and children’s health through funding and management of essential drugs at community level, World Health Organization, 1986

J.F. Outreville, The health insurance sector: Market segmentation & international trade in health services, 1998, P. 111-124