Narrow Networks: Strangling Choice or Adding Value?

We usually want to be in the middle of networks with plenty of strength and sprawl. People strive to have large professional and social networks. Wirelesss carriers brag about how big and reliable their networks are.

It was that way in health care, too. After the pushback against managed care in the 1990s, insurers loosened the reins. Come open enrollment, people were enticed to sign up for a health plan that had cast a wide net with a wide choice of providers or, often more importantly, a plan that their favorite doctor accepted.

But now all talk is of narrow networks and being much more selective—some providers say discriminatory—about which providers are included in health plan’s network, all in the name of value-based care.

David Harlow, one of my favorite bloggers (full disclosure: although he wouldn’t remember, his son went to the same day care in Newton, Mass., as my son) said this about narrow networks a couple of years ago:

“One managed care strategy that has long seemed incompatible with broad notions of the right to freedom of choice is the notion of establishing narrow networks. By establishing narrow networks, managed care plans have the opportunity to, um, manage care.”

Harlow also wrote this:

“…the point is that for managed care to work, the network must be managed. We’ve been kidding ourselves by pretending otherwise.”

But not everyone is so accepting of narrow networks as an obviously necessary ingredient in the organization of health care.

Last year, Medical Economics ran a piece with this punchy headline: “Narrow Networks: Obamacare’s broken promise and how doctors and patients can fight back.”

Valora Gurganious, of DoctorsManagement, a medical practice consulting firm in Knoxville, Tenn., was quoted in the piece as saying this about narrow networks:

“Their patients are being ripped away from them and that’s not right. They’re not being allowed to practice their craft. We’re in a major transition, and it’s going to be bumpy.”

We’ll see just how bumpy the ride is going to be.

A panel on the emergence of narrow networks I am moderating this morning at the 12th annual World Health Care Congress should provide some navigational insights.

The members of the panel include Juan Serrano, senior vice president at Catholic Health Initiatives; Jeffrey Gold, a senior vice president at the Healthcare Association of New York State; and Joseph Berardo, Jr., president and chief executive officer of MagnaCare.

We’ve had some discussions in preparation for this morning’s discussion. Juan, Jeff, and Joseph are on the optimistic side of the spectrum when it comes to narrow networks and the potential they have for getting the cost–quality balancing act right.

One thing I hope we can get into this morning is the role that ACOs will play in creating narrow networks. Provider organizations graded on quality and bearing financial risk may have an especially strong incentive to put together narrow networks.

I also help we’ll discuss what narrow networks will mean for the public. All of this aspirational chatter about value-based care will seem hollow and self-serving if people feel that narrow networks keep them from the health care they want and need.

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