If You Like Your Doctor You Will Be Able To Keep Your Doctor. Period
Minggu, 07 Oktober 2018
Benefit Shock,
Health Care Reform,
Health Insurance Reform,
Individual Health Insurance Market,
Insurance Exchanges,
Insurance Underwriting Reform,
Obama Health Plan,
Quality Health Care
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I think you can guess who said that.
Actually, here is what the President front-page story in the Washington Post this morning, "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?
A big variable therefore becomes the provider network. How big a variable? Take a look at this from a recent paper by the Center for Studying Health System Change:
This chart depicts the variation in hospital outpatient prices in 13 different U.S. cities. Hospital inpatient services also have wide variation. The authors pointed out that, "Typically, the highest-priced hospital is paid 60% more for inpatient services than the lowest- priced hospital," within the same market.
With this kind of hospital price variation and no other ability to vary the product there should be no surprise that insurers are now using narrow networks as a means to compete on the basis of price.
Physician prices also have a lot of variability within a market. The authors found, for example, in almost all thirteen markets, the prices paid to primary care practices fell into a narrower but still significant range, typically between 85% and 135% of the Medicare fee schedule.
I do not mean to imply this is the only tool health plans have. Just how they manage toward better-cost and quality outcomes also becomes a key variable. But you can easily see that just which doctors and hospitals a health plan picks for a plan to offer on the health insurance exchange can make a big difference in what that plan charges its customers.
Health plans and employer sponsors for sometime have also used "high performing" networks––a cost/quality distinction––as a means to better manage the cost and quality of care. However, it appears that many of these lower cost exchange plans are more focused just on provider prices.
Clearly, one of the consequences, intended or unintended, of Obamacare has been a dramatic escalation in the use of provider networks to vary health insurance exchange premiums.
Perhaps more notable, is that some health plans are only offering narrow networks on the new health insurance exchanges. Health plans, figuring that a great many of the new exchange customers will be coming from the ranks of the uninsured have decided to craft plans that largely include providers located where many of these uninsured people live and where they are most likely to get their health care anyway––perhaps not as big a deal for these folks who, because they are uninsured, don't have a regular provider relationship. But it also means these people will not have access to some of the most respected centers of excellence if they have a serous illness.
That has led to criticism that some of these networks are offshoots of Medicaid networks.
Another unintended consequence of this is that these narrow network plans are almost certain to become the lowest cost plans in the exchange. Remember, the federal health insurance subsidies are tied to the second lowest-cost Silver plan. Which health plan is offering that second lowest-cost Silver plan? Likely one of these narrow network plans. As a result, if you want a wider network plan, any cost difference for that plan becomes the responsibility of the consumer.
People who might be accustomed to broader networks found in employer health plans will have to either buy-up to better plans or may find their choices limited on the exchange.
Should we now regulate the health plans and force them to give everybody access to any provider they want? We could do that.
And, we could also have another rate shock debate.
I am reminded of that old axiom in health care policy. The health care system is like a balloon, you push it in here and it just pops our there.
Actually, here is what the President front-page story in the Washington Post this morning, "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?
A big variable therefore becomes the provider network. How big a variable? Take a look at this from a recent paper by the Center for Studying Health System Change:
This chart depicts the variation in hospital outpatient prices in 13 different U.S. cities. Hospital inpatient services also have wide variation. The authors pointed out that, "Typically, the highest-priced hospital is paid 60% more for inpatient services than the lowest- priced hospital," within the same market.With this kind of hospital price variation and no other ability to vary the product there should be no surprise that insurers are now using narrow networks as a means to compete on the basis of price.
Physician prices also have a lot of variability within a market. The authors found, for example, in almost all thirteen markets, the prices paid to primary care practices fell into a narrower but still significant range, typically between 85% and 135% of the Medicare fee schedule.
I do not mean to imply this is the only tool health plans have. Just how they manage toward better-cost and quality outcomes also becomes a key variable. But you can easily see that just which doctors and hospitals a health plan picks for a plan to offer on the health insurance exchange can make a big difference in what that plan charges its customers.
Health plans and employer sponsors for sometime have also used "high performing" networks––a cost/quality distinction––as a means to better manage the cost and quality of care. However, it appears that many of these lower cost exchange plans are more focused just on provider prices.
Clearly, one of the consequences, intended or unintended, of Obamacare has been a dramatic escalation in the use of provider networks to vary health insurance exchange premiums.
Perhaps more notable, is that some health plans are only offering narrow networks on the new health insurance exchanges. Health plans, figuring that a great many of the new exchange customers will be coming from the ranks of the uninsured have decided to craft plans that largely include providers located where many of these uninsured people live and where they are most likely to get their health care anyway––perhaps not as big a deal for these folks who, because they are uninsured, don't have a regular provider relationship. But it also means these people will not have access to some of the most respected centers of excellence if they have a serous illness.
That has led to criticism that some of these networks are offshoots of Medicaid networks.
Another unintended consequence of this is that these narrow network plans are almost certain to become the lowest cost plans in the exchange. Remember, the federal health insurance subsidies are tied to the second lowest-cost Silver plan. Which health plan is offering that second lowest-cost Silver plan? Likely one of these narrow network plans. As a result, if you want a wider network plan, any cost difference for that plan becomes the responsibility of the consumer.
People who might be accustomed to broader networks found in employer health plans will have to either buy-up to better plans or may find their choices limited on the exchange.
Should we now regulate the health plans and force them to give everybody access to any provider they want? We could do that.
And, we could also have another rate shock debate.
I am reminded of that old axiom in health care policy. The health care system is like a balloon, you push it in here and it just pops our there.
