Switching doctors because you’re unsatisfied with the service is one thing. Being forced to change because your insurance company has a “narrow network” is quite another.
As health insurers look for ways to cut costs, narrowing their provider networks is an increasingly popular option. But not all consumers are happy with their lack of choices, even when a narrowed network translates to a cheaper policy.
A health care network is a group of medical providers who contract with a health insurance company to provide services to insured consumers at lowered rates. As a patient, if you visit a doctor or hospital in-network, your insurance company will pay a greater percentage of your care. If you go out of network, you’ll pay more or even be stuck with the entire bill.
A McKinsey study found about 48 percent of all exchange networks are considered narrowed, and in large cities, such networks account for 60 percent of those present. Though these restricted networks aren’t new, they are growing in prevalence.
Where Narrowed Networks Came From
Narrowed networks didn’t begin with the Affordable Care Act. These networks were at the center of tightly controlled health maintenance organizations in the late 1980s and early 1990s. They spurred considerable consumer backlash and led lawmakers to propose minimum standards for provider networks. Since the implementation of the ACA, and a resurgence of creative methods to control health care costs, narrow networks have again become a topic of controversy.
The ACA restricted many methods that insurers were accustomed to using to control costs. High deductibles are now capped, denials due to pre-existing conditions are banned and health insurance plans must provide essential benefits in order to be compliant with the new law.
Network control is one of the few remaining methods for cost control, and with consumers demanding a wide range of plans to choose from, network adjustments allow insurers to offer a variety of plans at several price points.
What Narrowed Networks Mean for Providers
As health insurers seek out hospitals and providers that boost their bottom line, these providers, in theory, have an incentive to offer the highest-quality care at a lower price, increasing the likelihood that they’ll earn themselves a spot in certain restrictive networks. Donald Furman, chief strategy officer for Alignment Healthcare, says these networks are seen more as selective rather than restrictive, from a medical provider’s point of view.
Health insurance companies “have assembled a network of high-quality providers who will ultimately improve outcomes for their patients,” he says. “Doctors who are part of a narrow network will see more patients from these exchange plans and will benefit when they work as a team under a coordinated care model.”
For patients, Furman says, the benefits can be a lower premium and higher-quality care. But, as consumer backlash shows, narrowed networks have obvious problems.
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