Drew Altman, Kaiser Family Foundation,
October 10, 2018
Adapted from Kaiser Family
Foundation; Note: "49 workers" category includes firms
that have 3 to 49 workers. Chart: Axios Visuals
There's
been a lot of discussion of
narrow provider networks and how they reduce costs by limiting access to the
highest priced providers. They're commonplace in the Affordable Care Act
marketplaces where about 10 million people are enrolled, and in the individual
market generally — but they are actually quite rare in the group market,
where about 152 million Americans get coverage through their employers.
Why it
matters: Don't confuse the ACA with the health insurance market most
people use. Narrow networks are the exception, not the rule, in the private
insurance system overall, and there is little reason to believe that will
change any time soon.
The
details: As the chart shows, only 7% of firms offering
health benefits offer narrow network plans, and just 2% report that they or
their insurer eliminated a hospital or health system from a provider network in
the past year to reduce costs.
- By contrast, as Vitals has reported, narrow networks
are much more common in the individual market. Just 29% of insurance plans
in the individual market provide any benefits for out-of-network
providers, down from 58% three years ago.
- In addition, a report by
the consulting firm Avalere found that restrictive network plans made up
73% of the Affordable Care Act exchange market in 2018.
- Surveys also
suggest that people who have been uninsured or buy their
own coverage may be more willing to accept a tradeoff between provider
choice and costs than workers in the group market.
The big reason
larger employers have not moved to narrow networks in significant numbers:
it’s difficult for them to satisfy a diverse workforce with a limited network
of doctors and hospitals, especially in a tight labor market. It’s particularly
difficult for them to exclude the most prominent (and often most expensive)
providers.
- Where they are interested, they tend to
promote what they regard as high performance networks that meet their
guidelines for delivering high value care, not necessarily the lower cost
networks more common in the non-group market.
Between the
lines: The public often has — and is both intentionally and
unintentionally given — the impression that what’s happening in the ACA
marketplaces is happening the larger health system. That’s what happened when
the general public believed that sharply rising premiums in the ACA
marketplaces were affecting them
when they were not.
- The debate over narrow
networks has an impact on the ability of employers and insurers to control
medical prices. While there are arguments for and against narrower
networks, and the details matter, they are one of the few
tools employers have to gain leverage over providers and put pressure
on prices.
- If an employer (or insurers acting on
behalf of employers) is not willing to exclude a particular hospital, it
has no leverage in price negotiations. Mostly, employers and insurers are
losing the price wars today.
The bottom
line: Controversial developments like narrow networks in the
individual market deserve attention, but also context. They are still a rare
bird in the group market where the largest share of Americans get their
coverage.
No comments:
Post a Comment