narrow networks

Insurance Con Artists

Dr. James Binder recently wrote an article on one of the manipulations that health insurance companies use to circumvent the new insurance regulation that makes it illegal  to deny insurance coverage on the basis of pre-existing illness. So what do they do? They create multiple tiered drug benefits which generate high out of pocket expenses for people under treatment for serious illness such as cancer, rheumatoid arthritis and multiple sclerosis. This drives these patients away to find a different source of insurance, which means more expensive. The industry has found a way to discriminate on the basis of pre-existing illness.

It should be mentioned that the insurance companies have a similar ruse in developing narrow networks. This creates an automatic screening of patients with chronic illnesses. First, by excluding major referral centers (like Children’s Hospital in Seattle) they drive patients to other insurance or it forces them to pay large amounts out of pocket to continue to see their specialists who have been taking care of them. They also make their insurance policies unpalatable by excluding large percentages of all of the physicians practicing in the area. For those individuals who are basically healthy it does not present too big of a problem to choose a physician from the approved list. But for those patients who have multiple chronic illnesses and multiple specialists it becomes almost impossible to find all of their usual physicians on any one narrow plan. And, of course, the plans change providers every year. So, again, they look for more expensive broader networked plans, and they are back to the old problem of paying higher premiums because of pre-existing illnesses.

As Dr. Binder says, “It is well past the time to rid the health care system of these middlemen.” How? Improved, expanded (to everyone) Medicare. For more see…

Family Docs Squeezed by Narrow Networks

The American Academy of Family Physicians in a recent article has complained about the “Arbitrary Elimination’ of Physicians From Insurers’ Networks.”

I Commented:
Narrow networks are just the latest insurance subterfuge.  No matter what CMS does the insurance companies will always be ahead of them in the gaming of the system.   When will the AAFP get wise and endorse single payer medicine?

Dr.George Barron Replied:
To see this problem as an insurance subterfuge and in the same breath ask the AAFP to endorse a single payer system betrays a thorough misunderstanding of the current problem as well as the proposed solution. I think every physician who believes in the utopian notion of a single payer system either spend a year working in the VA system or a week as a patient in the VA system

Thank You:
Thanks, Dr. Barron, for responding to my comment on the AAFP denouncing the “Arbitrary Elimination of Physicians from Insurers’ Networks.” I am sorry that you have had such poor experiences as a physician and patient with the Veteran Administration.   Obviously you were not in the Rand Corporation study of the VA medical system which stated that “Based on 294 health indicators in 15 categories of care, they found that overall, VA patients were more likely than patients in the national sample to receive recommended care. In particular, the VA patients received significantly better care for depression, diabetes, hyperlipidemia, and hypertension. The VA also performed consistently better across the spectrum of care, including screening, diagnosis, treatment, and follow-up. The only exception to the pattern of better care in VA facilities was care for acute conditions, for which the two samples were similar.”

I think we can both agree that government run programs (like the Air Force, the CIA, the Federal Reserve System, Medicare, etc.) all leave room for improvement. And I assume that your dislike for these agencies will tempt you to forego any Medicare limitations and rely on your own personal finances and private insurance for your future health care.  However, some of us are not satisfied that, with our insurance-based medical system, the U.S. pays almost twice as much as any other industrialized country and yet ranks 11th in health care quality. And the first 10 countries have some form of single payer medicine. And, like the AAFP, we are not satisfied that health insurance companies are eliminating primary care physicians from plan networks across the country.

U.S. Healthcare Overall Rating

We describe single-payer medicine as improved Medicare for all. The ‘improved” part of this is important. No one believes it will not take a lot of work.  In addition to system changes we need to insure that the program is appropriately funded and relative immune from political micro-management. And we should start now.  I assume you would not be interested in joining me and the 19,000 other members of  Physicians for a National Health Program.

AAFP Complains

The American Academy of Family Physicians in a recent article has complained about the “Arbitrary Elimination’ of Physicians From Insurers’ Networks.”

Narrow networks are just the latest insurance subterfuge.  No matter what CMS does the insurance companies will always be ahead of them in the gaming of the system.   When will the AAFP see the light and endorse single payer medicine?


Narrow Networks. Value only for insurance Companies

The recent article by Alicia Caramenico in Fierce Health Payer,, expresses a few of the problems with narrow networks. The three main problems went unmentioned however.

  1. The main value of the narrow networks goes to the insurance companies who use them to cherry-pick policy holders and providers on the basis of what’s good for the bottom line of the insurance company.
  2. The panel highlighted in the report consisted of “featured leaders representing a nonprofit health system, health insurers, insurance commissioners and a healthcare economist.” There was no mention of the opinions of physicians and patients.
  3. The whole issue is nothing but an insurance underwriting problem that would not exist if we had single payer medicine.

Please see for more on Narrow Networks

Non-Medical Experts Like Narrow Networks

Accounting firm experts in “strategic planning and change management” and “government programs operation” like narrow networks. They use the word Value in medical care as if they know what it means and how to measure it. Their theme is that narrow networks are essential to reduce healthcare costs. Now if we can just get physicians and their patients to accept the damage these plans do to true, comprehensive, personal medical care. They forget to mention the smarter way to control costs while truly serving the entire population, viz., single payer medicine.


NARROW NETWORKS: Less Choice, More Cost Shifting

As the Affordable Care Act (ACA) unfolds we are now entering the era of the health insurance exchanges. In response to the law’s various requirements the insurance industry is remodeling its concept of provider networks to create new “narrow” networks for the individual and small group markets.  This is a throwback to the failed HMO concept of severely limiting patients’ choices of physicians and hospitals in a cynical effort to control costs. In the exchanges the insurance companies must offer products that cover the list of Essential Health Benefits (EHB) and  their plans must meet actuarial values (AV) specified for various ”Metal” levels, e.g., Bronze =60%, Silver=70%, etc. The AV is the expected percentage of all the medical expenses that the insurance company will pay in that category. Enrollment in a plan cannot be denied on the basis of pre-existing medical problems and there can be no lifetime cap on covered expenses.

In response to these requirements most of the plans being designed in the various states use a narrow list of doctors, hospitals, laboratories, etc. The insurers have large amounts of data to guide them in choosing the least expensive providers. This choice does not concern itself with quality of care no matter how the insurance companies try to frame it. The required size and makeup of the plans is rather loosely defined with federal rules stating that the insurers “must maintain a network of a sufficient number and type of providers, including providers that specialize in mental health and substance abuse, to assure that all services will be available without unreasonable delay.” State rules are generally just as vague.

Every day we now read about the latest shift to narrow networks. In Massachusetts, insurer Harvard Pilgrim launched its Focus Network, plugging 10 percent lower premiums. In California, Blue Shield has a number of SaveNet HMO plans that contract with select doctor and hospital groups, creating networks averaging a little more than half the size of its standard ones. For example, one serving Marin and Sonoma counties will offer a network of about 100 primary care doctors and 325 specialists. Anthem Blue Cross Blue Shield in Wisconsin and Aurora Health Care have secured the first major company to offer their health plan that guarantees cost savings of at least 8 percent for employers (not for patients). This is occurring all over the country. A McKinsey & Co. analysis found 47 percent of 955 plans proposed for the online marketplaces were for health maintenance organizations or plans with similar designs. The New York Times recently published an article by Robert Pear highlighting some of the concerns about this problem. He quotes a recent Pricewaterhousecoopers HealthResearch Institute report that discussed insurers bypassing major medical Centers in numerous states including California, Illinois, etc.

When insured by a narrow network policy it becomes a hazard course for anyone (you) trying to choose a new physician, replace the physician who has known you for years or find a specialist, especially a sub-specialist. “Yes, we have a cardiologist in your area. No, we don’t have an electrophysiologist in your plan. ” Or maybe your primary care physician feels that the best orthopedic surgeon for your type of problem is one that isn’t on your narrow plan’s list. Or the specialist in the network wants you to go to the nearby university medical center. If you make a mistake and go to a non-plan hospital you may end up with thousands of dollars of unpaid bills.  Or the hospital may be on the list but the contracted group of “hospitalist” physicians may not be. And maybe you went to that hospital because you were out of town on vacation. With these hurdles add the fact that the narrower the network the fewer the alternatives and the longer one will have to wait for an appointment.

The plans being offered are low priced and have high deductibles and co-pays. They will appeal to the young and healthy who, at the time of enrollment, haven’t needed medical care.  Patients with multiple and complex medical needs are not going to be satisfied with the limited coverage, limited physicians (may not even include their long term primary care physicians and specialists), and limited hospitals, etc. This gives the insurance companies an opportunity to cherry-pick the least costly patients without violating the regulation against denial for pre-existing illnesses. When they develop their new narrow networks they also refine their cherry-picking techniques even further by mining the usage data from their old networks to weed out the providers who care for the most complex cases. Furthermore they also can count on costs being diverted to the patient when a patient’s care is acquired outside the narrow network either intentionally or unintentionally.  All of this is done under the ruse of cost-containment. The goal is to take in as much money as possible and to pay out as little as possible.

The shell game of cost-shifting to the patient is not cost containment. Of course all of these problems of cost, choice and continuity of care would be non-existent in a system of universal coverage such as single payer medicine.


Suggested Reading:

Insurers limit doctors, hospitals in state-run exchange plans
Exclusive arrangements and tight networks become more common as insurers and government officials search for ways to hold down medical costs.
   May 24, 2013|By Chad Terhune, Los Angeles Times

Can narrow networks boost exchange coverage?
   January 25, 2013 | By Dina Overland, FierceHealthPayer

HMO-Like Plans May Be Poised To Make Comeback In Online Insurance Markets
   Jan 22, 2013 |By Julie Appleby KHN Staff Writer, Kaiser Health News

Narrow network plans could drive up costs
   September,19,2013|By Dina Overland, FierceHealthPayer

 Insurers limiting doctors, hospitals in health insurance market
   September 14, 2013 | By Chad Terhune, Los Angeles Times

Lower Health Insurance Premiums to Come at Cost of Fewer Choices
   September 22, 2013 |By Robert Pear, The New York Times

Most exchange plans limit member choice
   August 16, 2013 |By Julie Bird, Fiercehealthpayer

 Health Exchanges: Open for Business
   HRI’s Closer Look
PricewaterhouseCoopers Health Research Institute