The concept of restrictive (oh let’s call them euphemistically “narrowed”) networks has for decades been the third rail of healthcare. Ask Hillary Clinton, who put her foot on that third rail in the 1990’s while attempting to reform healthcare. In the same vein, HMOs in the 90’s also tried to restrict networks, resulting in vicious backlashes.
One of those backlashes was the enactment in many states of so-called “any willing provider” or “freedom of choice” legislation. At last look, some 27 states still have a form of such legislation on their books. Most credible studies show that such laws increase the cost of healthcare.
Moreover, the ability of insurers to remove physicians from their network in many states is severely restricted by so called “fair hearing” legislation that makes the pain of achieving physician expulsion worse than the pain of leaving under performing physicians in network.
We understand that when a physician cries “foul” against an insurer, public sentiment will favor the physician, and over the years, it certainly has been reflected in this and other legislative attempts to tie insurers’ hands. After all, no one wants to go to the prom with a health insurer.
As a result of this and other phenomina, there has been the highly chronicled swoop toward mediocrity in the delivery of healthcare in the United States. And insurers have certainly contributed here. Up to now, insurers have paid physicians using the fee for service payment method. This method merely requires physicians to demonstrate that they performed a function, at which point they are paid at an amount that does not vary regardless of quality or outcome. This is a completely volume driven environment with predictable results.
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