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Tag: Provider networks

The Real Reason You May Not Be Able to Keep Your Doctor Under the New Healthcare Law


Here is what the President said at the American Medical Association Meeting in July, 2009––and likely lots more times:

“No matter how we reform health care, we will keep this promise: If you like your doctor, you will keep your doctor. Period. If you like your health care plan, your will keep your health plan. Period. No one will take it away. No matter what. My view is that health care reform should be guided by a simple principle: fix what’s broken and build on what works.”

We have all heard this repeated many times before in recent weeks. But with the front-page story in the Washington Post yesterday, “Health Insurers Limit Choices to Keep Costs Down,” it’s as if somebody rang a new bell this time focused on the “you will keep your doctor” part.

It’s not like we haven’t been talking about more narrow networks becoming a staple of the new health insurance exchanges.

It is as if some of this stuff is just starting to sink in.

Why the limited networks?

In the old health insurance market, insurers competed for business through price and plan design. Network size has historically been a minor factor with consumers and employer plan sponsors expecting to be able to use about any doctor or hospital, especially those with the best reputations.

But with the Affordable Care Act, health plans lost two of their historically big plan pricing variables; medical underwriting and plan design.

Under Obamacare, insurers can no longer underwrite, or exclude people, to keep the cost of their individual market health insurance plans down––a good thing.

Under Obamacare, insurers can no longer offer a wide variety of health insurance products in the individual health market––a good thing when it gets rid of the worst of the health plans out there but not such a good thing when it gets rid of the many policies people could choose and have liked and are now mad about losing. Now, all health plans have to fit into four strict boxes: Bronze, Silver, Gold, and Platinum. And, these boxes can only differ by out-of-pocket costs––not benefits.

So, if a health plan can no longer vary its benefit choices, how can it distinguish itself on price?

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Mr. President, I Like My Health Insurance. I’d Like to Keep It. Can You Please Help Me Out?

How many times have I talked about rate shock, the millions of people who would be getting cancellation letters from their current health plan, and the problem of people having to put up with more narrow networks?

And, how many times have those predictions been met by push back and spin: Today’s policies are just junk and people will be better off finding lower cost health insurance under Obamacare.

I have been in this business for 40 years. I know junk health insurance when I see it and I know “Cadillac” health insurance when I see it.

Right now I have “Cadillac” health insurance. I can access every provider in the national Blue Cross network––about every doc and hospital in America––without a referral and without higher deductibles and co-pays. I value that given my travels and my belief that who your provider is makes a big difference. Want to go to Mayo? No problem. Want to go to the Cleveland Clinic? No problem. Need to get to Queens in Honolulu? No problem.

So, I get this letter from my health plan. It says I can’t keep my current coverage because my plan isn’t good enough under Obamacare rules. It tells me to go to the exchange or their website and pick a new plan before January 1 or I will lose coverage.

First, the best I can get in a Blue Cross network plan are HMOs or HMO/Point-of-Service plans. In the core network those plans offer, I would have to go to fewer providers than I can go to now in the MD/DC/VA market. And, the core network has no providers beyond my area. I can go to the broader Blues network but only if I pay another big deductible for out-of-network coverage.

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In Defense of Narrow Networks

It wasn’t long ago that the newly established health exchanges were being celebrated. Before the ongoing website catastrophe, politicians and policymakers were lauding the low premiums in these new health insurance market places. On September 24, President Obama said, “And the premiums are significantly lower than what they were able to previously get … California — it’s about 33 percent lower. In my home state of Illinois, they just announced it’s about 25 percent lower.”

How times have changed! Even supporters of the exchanges have rightly criticized the technical problems that have prevented millions of Americans from signing up. However, many critics are also complaining about the large number of health plan offerings with “narrow networks” of physicians that enrollees can visit for medical services. The Missouri Health Advocacy Alliance expressed “major concern” when Anthem excluded BJC HealthCare from its narrow network. Seattle Children’s Hospital, which was excluded from several exchange plans, has sued the Washington State Office of Insurance for “failing to ensure adequate network coverage.”

Criticism of narrow networks is misguided and counterproductive. As we explain below, narrow networks will be of little consequence to most of the individuals who sign up for the exchanges, and the elimination of narrow networks could eliminate our single best opportunity to harness market forces to reduce costs and improve quality. Indeed, narrow networks are largely responsible for the low premiums that were being celebrated just one month ago.

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A Field of Dreams?

study released last week by the Massachusetts Attorney Generalcontains surprising data to challenge two commonly held ACO (accountable care organization) ”Field of Dreams” assumptions. These assumptions relate to patient ”leakage” — out-of-network patient care and referrals.

1) Hospital administrators assume that tighter physician-hospital integration (e.g., through employment of physicians) will result in ”captive referrals” by physicians back to the mother-ship hospital.

2) Medicare administrators are assuming that Medicare Shared Savings ACOs will be able to coordinate patient care even without limitations on patients’ choice to go to providers outside of the ACO provider network.

Here’s the data that challenges the validity of BOTH of these assumptions:

Particularly for provider systems where hospitals and physicians are jointly at risk for the quality and cost of patients’ care, and have worked together to coordinate and improve care, we would expect to see physicians referring to their partner hospital more often. However, for the two physician-hospital provider systems in Massachusetts with the most years of experience managing referrals for HMO/POS patients under a global payment, one health insurer’s 2009 referral data shows that only 35-45% of adult inpatient care, as measured by revenue, goes to the partner hospital. That percentage can be even lower for providers with little to no experience managing where their patients receive specialist/hospital care, or under plan designs that do not require referrals. [emphasis added]

 

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