Tuesday, July 22, 2014

A sign of the times

There's a good article by Paul Demko at Modern Healthcare about narrow networks, "Providers, insurers grapple with narrow-network backlash." Here's the lede:

Narrow networks are a reality of the new health insurance landscape. Nearly half of all insurance plans sold on the public exchanges in 2014 were narrow network plans, defined as those with less than 70% of area hospitals included, according to an analysis by the research firm McKinsey & Company.

But given that reality, insurers and providers need to do a better job of providing consumers with accessible, easily understandable information about networks when they shop for coverage. That was the message conveyed by participants in a panel discussion about network adequacy on Monday in Washington sponsored by the Alliance for Health Reform.

Need to do a better job?

Sorry, but didn't they think about this beforehand? If we add in the expanded use of high-deductible plans, there is a sea change in what "insurance" actually means. I'd have hoped the industry was more attuned to consumer response than to look back and say, "We need to do a better job."


Barry Carol said...

There is undoubtedly a lot of room for improvement here with respect to the accuracy of the information about which providers are in the network and which aren’t. It’s also extremely aggravating for patients getting treatment in a hospital setting to find that the hospital is in the network but the doctors treating them are not. This problem occurs often especially with radiologists, anesthesiologists, pathologists and ER doctors which patients usually have no role in choosing.

I’ve said numerous times that there needs to be special rules covering how much can be charged for care that must be delivered under emergency conditions which I define as care that could not be scheduled in advance. Such care includes ER visits and hospital admissions or observation stays immediately following an ER visit. Either the insurer’s network rates should apply under these circumstances or there should be a limit of some reasonable percentage above the Medicare rate.

nonlocal MD said...

Barry, many hospitals now put into the RAPE physicians' (the ones you noted in your comment) contracts that the physicians must be members of all the same networks that their contracting hospitals are. This should be pretty standard now, after a lot of bad PR from the situation you describe.

Barry Carol said...


I’m very happy to hear that. That should be standard practice for all doctors who practice within hospitals.

Mitch said...

I agree the companies involved could have done a "better job", and no one would ever confuse good marketing and consumer focus with health insurers. Nonetheless, I am not sure they all did a bad job and consumers are also at fault. One of the key ways to control cost is of course a narrow network, and many people have not had to deal with this before. They probably did a poor job or perhaps didn't look at all, say for example assuming that surely their doctor would be involved. This behavior will change rapidly as narrow networks and exchanges proliferate. Change takes longer than people think, but when it does happen it is faster. It is happening.

Initial Truth said...

I think you misunderstand the sales process. An industry puts into place a product with a cheaper price and didn't make it clear to consumers that the price comes with restrictions, be it a narrower network or a higher deductible. The industry only clears up those misperceptions when faced with a consumer backlash.

How shocking. Next thing you know, you'll expect food companies to highlight that they've reduced ingredients but kept the box size the same. Or that a car company has jiggered the list of "standard equipment" to keep the base price low. Or perhaps the airlines are really victims of an evil government that makes them disclose the price with taxes and fees.

As someone who helped my daughter shop on an exchange, I agree that consumer disclosure wasn't very good. That the insurance industry, or any industry, thought they could get away with it without a backlash? Not surprising at all.

Bob said...

"Attuned to consumer response?" Are you kidding? And I hope that Russia realizes that Putin is not a good man and deposes him. About the same odds.

In a deeper sense, remember that the gamble that Obamacare takes is that the insurance company way of doing business can be reformed by new incentives and a partially new playing field. The barrier is that corporate cultures tend to be immutable, at least without very strong leadership.

The problem is that I haven't seen any changes in leadership whatsoever in health insurance companies. My hope would be that, since the creation of HIEs makes marketing a much smaller problem than previously, new companies could emerge, with new cultures, truly serving the public, with real transparency.

disgusted doc said...

Time for me to stop reading this blog when someone who knows nothing about medicine and does not live in this state opines and opines and opines with little genuine understanding but lots of opinions regarding what the healthcare folk who are actually providing care should be doing. Enough also with ragging on PHS. Consumer response is that folks want to go to PHS and do not care what a bunch of marketing and business wonks think.

Paul Levy said...

A shame to have you leave. Would love to get your substantive views on these issues.

Paul Levy said...

And if you leave, you will permit other views to persist without rebuttal. Again, that would be a shame.

nonlocal MD said...

Dear disgusted doc;

Unfortunately your attitude prevails among many physicians and is one reason we are getting crushed in the current environment. There are no 'qualifications' for being a commenter on health care in general and on this blog, especially with what is being paid for it. It is an opportunity to see what the layman thinks which is often a window to what will come.

As for consumers wanting to go to Partners, where I assume you work, the era of those lucky consumers with good insurance getting whatever they want without paying for it is unsustainable and will end soon. The shame of Partners is that there is no reason for their care to cost so much more; in fact their administrative costs should be significantly lower due to all this consolidation. There is nothing so different about them as to justify charging 3x more for the same product, sorry.

disgusted doctor said...

Dear nonlocal,
My will to depart was weak. I am retired, but was at the place that fired Levy---asked him to resign, whatever. Though you were mistaken about my working at Partners, I do receive my healthcare there after some discouraging experiences out in the community hospitals. I also agree that the actual providers of healthcare are being crushed in an environment where costs of care are being driven well beyond our ability to sustain while the appetite for more continues. I watch with sadness as my former associates struggle harder to maintain practice when there are so many folks biting into the pie---and at so little yield for the patient. The administrative costs in this country are shocking, and the game playing going on at hospitals figuring out new ways to bill for more is obscene. Not only Partners hikes up their costs for facility fees and one way or another it is passed on to the patients who do indeed pay. I have yet to see truly transparent figures regarding costs of care at different institutions and I am not naïve not inexperienced enough to be convinced that care an be compared apples to apples among and between institutions based on the parameters used. When almost 100% of a medical staff seeks care at PHS, Tufts or BUMC; patients notice and follow. I do not know what state you currently practice in, but things here have been difficult for some time----other states will soon follow. Massachusetts physicians are under great stress. Health care has become business and business seeks to make money. Period.

nonlocal said...

Dear Disgusted doc; I couldn't agree more with your last 2 sentences. The monetizing of medicine (unfortunately with the eager participation of the more entrepreneurial physicians as Paul has documented many times) has been its downfall.

However, it is my observation that Boston has to have the most distorted health care market I have ever seen. The way you all seek care up there would mean that comparably, I would go to Johns Hopkins every time I needed routine care. Just doesn't happen. People run in and out of academic centers there like they are the local community hospital.

With predictable results - everyone practices at the AMC's so the community hospitals are lousy, and you pay through the nose - if not directly, then through the indirect costs of all those premiums. Not sure how all that started, but Partner's has played it to a T. No thanks.