“Insurers rely on the threat of exclusion rather than the narrowness of their networks—providers that do not face the threat of exclusion have little reason to temper their demands for higher prices,” he said. Quality of care also may improve when insurers select networks based on quality performance. Mergers, acquisitions and less-formal deals such as joint operating agreements have further consolidated some markets and major players, including some of the largest hospital systems in the nation.
Health plans owned by hospital operators, the number of which has grown since passage of the Patient Protection and Affordable Care Act, can coordinate care through narrow networks of the systems’ own providers, he said. Expanded network rules could undermine those efforts. “Groups with such integrated systems will find their task much more difficult if they are forced to contract with outside providers, some of whom are their competitors.”
These potential benefits outweigh the risks that regulation could stop insurers from manipulating networks to discourage the most costly consumers (high-risk patients who need expensive care) from buying their health plans. “Plans that offer broad provider networks and access to specialized health care providers risk attracting high-cost enrollees,” Howard said.
Nonetheless, narrow networks help to control costs and network regulation could politicize the size of networks, he said. “These regulations promise to expand plans’ networks, but regulators should not assume that a pro-provider stance is inherently pro-consumer or pro-patient,” he said.
Follow Melanie Evans on Twitter: @MHmevans