Narrow healthcare networks are not unique and have been in existence in some form since the 1980s. A classic example of a narrow healthcare network are HMOs, also in existence for three decades. There has been a resurgence of narrow healthcare networks since the introduction of the Affordable Care Act, and they are becoming more common in commercial plans and Medicare Advantage.
A common theme among the different plans is that they generally offer lower premiums. As these networks have gained in popularity, there have been concerns on how they affect consumer choices and access to healthcare. Consumers are often attracted to these narrow network plans because of the low premiums, with a general understanding that the network range of services is less and there may be additional out-of-pocket expenses (unfortunately many consumers never read this fine print).
What the public has discovered following open enrollment on the National Healthcare Exchanges is that, after purchase, most of the coverage offered by these networks are much more narrow than they were led to believe. Also, in some cases, the premiums have been higher than for previous, similar services. The reason insurers typically claim is that the Affordable Health Care Act exposes them to millions of individuals who are sicker than expected. The insurers claim that they are taking on more risks than anticipated because of their higher costs for chronic disorder coverage for new enrollees.
Insurers say they are reigning in costs of care by streamlining more patients to fewer healthcare centers. To help them offer lower premiums, they bring in more patients to a specific facility. In the end, they have more bargaining power when it comes to negotiation with providers. However, under the ACA, patients are being sent to cheaper community hospitals with average facilities instead of large academic centers with the gamut of medical expertise.
Numerous anecdotal reports from patients reveal that these narrow healthcare networks may be even more narrow than what they were initially told, which has left many consumers vulnerable to exorbitant out-of-network financial burdens. For example, a patient may have surgery to remove the colon, only to find later that the anesthesiologist was not part of the narrow network. Thus, the patient is left to pay for the full range of anesthesia services out of pocket, which are significant.
These narrow networks initially offer high-value services, but consumers often lack the knowledge to know what may or may not be covered later. Even though the ACA requires all qualified health plans sold in exchanges to offer provider networks meet a “reasonable” standard of health care delivery, this is not always the reality. While insurers claim that consumers are getting better deals with low premiums, this has proven true only for healthy individuals who are not chronically ill.
Recently, the AcademyHealth panel looked at the design and operations of narrow healthcare plans (See: Implications of Narrow Networks and the Tradeoff between Price and Choice). While they noted a positive and effective early experience, they are concerned about the type of healthcare delivered . Thus far no one has evaluated the care delivered by these narrowed networks and how they affect patient morbidity or mortality. Consumers are currently at the mercy of these insurers and their inflexible plans. Further, there has been no oversight into these narrowed networks and the quality of care they deliver long term.
While the ACA has made healthcare available to all Americans, it has also created tiers in the healthcare system based on ability to pay. This has eroded any semblance of equal and universal healthcare for all Americans. Simply being insured does not mean one has access to all types of medical care.
Greater education and straightforward explanation of “fine print” information is needed. Average health insurance consumers are not experts on health coverage or familiar with terms us “insiders” deal with on a daily basis. Terms such as deductible, out-of-pocket expenses, in-network care, out-of-network care, services covered, maximum payouts, and more are as familiar to a great majority of Americans as terms like interoperability, FHIR, and Meaningful Use for anyone not in health IT. Something needs to change.
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