Exclusion of Doctors and Hospitals from Networks and the Race to the Bottom

You pays your money,  and you takes your choice.

English Proverb, quoted in Punch, Volume 10, 1886

In the midst of all the turmoil in health care these days, one thing is becoming clear: no matter what kind of health care choice, they will find fewer doctors and hospitals in the network – or pay much more for the privilege of going to any provider they want.

Reed Abelson, “More Insured,  but the Choices are Narrowing,"  New York Times,  May 12, 2014

People sometimes forget doctors are people too.  They develop loyalties to patients.  They look forward to seeing them again, treating them, and  talking to them about their troubles and families.  

Doctors resent it when  their hospitals and themselves  are  suddenly and arbitrarily excluded from health plans networks for reasons they do not understand  and cannot uncover. It comes as a shock to them that health plans are systematically excluding them and their affiliated institutions on a large scale.  This has become glaringly  evident with ObamaCare health plans,  which offer high premiums with high deductibles and lower doctor reimbursements to narrow networks of hospitals and doctors. 

Doctors are increasingly feeling they are merely anonymous   toys or chess pieces to be manipulated  on the health care board at the whims of health plans and government.

Health plans maintain narrower networks are essential for controlling  costs and managing care.  The plans are betting lower premiums are more important than doctor or hospital loyalties.   They are also betting patients will not mind being excluded from their present doctors  and from high end institutions like the Mayo Clinic, the Cleveland Clinic, Seattle Childrens', Sloane Kettering, and other prestigious institutions.

After all, high end doctors and hospitals and large networks  which include these providers often have  higher expenses for health plans. “The larger the network, the higher the cost,” says Larry Boress, CEO of the Midwest Business Group on Health.  “We have to break people away from this choice habit everybody has,” says Marcus Merz, CEO of Preferred One, a  Minnesota PPO,” We’re all trying to break this fixation on open access and broad networks.”  Big employers like Walmart and GEO have even gone so far as to contract directly with four hospitals for expensive procedures like joint replacements.

The driving force behind the narrowing process is lower costs.  Health plans are now selling networks  rather than broad access to providers which include specialized hospitals.  High costs from hospitals and doctors with high reputations are falling by the wayside.

Exclusion of hospitals and doctors has run into resistance in states like Washington and New Hampshire, where many institutions with their doctors have been excluded from ObamaCare health exchange recipients.   Insurers  think people will choose narrow networks with low costs  over open networks  which may feature their current doctor.

Opponents of network narrowing call the health plans’ approach “a race to the bottom,” meaning the bottom dollar or bottom line transcends  quality or reputations of hospitals and doctors.  

From the doctors’ point of view, there are fundamental problems with the narrowing approach: 

·  One, the exclusion tends to be sudden and arbitrary and often comes as a complete surprise.

·           

Two the rationale  behind exclusions tend to be secretive and unexplained and impossible to decipher.

·  Three, complying with network 3^rd party requirements  are expensive and is coupled with low reimbursements.  

Consequently,  many doctors and doctor groups are not accepting patients in health exchange plans  while others are switching to doctor pay independent practices and contracting directly with patients and self-insured businesses.

Tweet: Health plans are narrowing hospital and physician networks to lower costs with the hope that lowe3r premiums will attract health consumers to their plans.

**video Link  to my May 9 talk  Before the American Association of Physicians and Surgeons in Minneapolis is:

http://youtu.be/Vleb1kuBn3o

The talk,  entitled “Direct Pay Independent Practice: Remnant of the Past and Wave of the Future,”  is 20 minutes long.

___________________

 

My new E-book Understanding ObamaCare: Travails of Implementation: Notes of a Health Reform Watcher is now on Amazon. The Kindle edition sells for $3.99.   You may be interested in reading it since ObamaCare may determine  the outcome of the November midterm elections.  You may also order the book from Westbow Press, a division of Thomas Nelson Publishers,  or at its 35,000 outlets, which include bookstores, who  can help order the book for you.   This is the first of 3 E-books on ObamaCare,  Rhe second book will be called ObamaCare Revealed,  and the third will be ObamaCare: Dead or Alive.

Richard L. Reece, MD, 1-860-395-1501,  doctor.reece@gmail.com