What size physician network is right for you?
That's the crux of a study conducted by the University of Pennsylvania's Leonard Davis Institute of Health Economics and funded by the Robert Wood Johnson Foundation. To make the findings more accessible and attractive to consumers, they presented their findings in the same way customers would sort through the T-shirt rack at a department store: by size.
The study, released Wednesday, claims to be the first examination of narrow networks to include data on individual physicians, and not just the number of hospitals covered.
Four in 10 silver plans sold on the insurance exchanges in 2014 had narrow networks, meaning they covered fewer than 25% of physicians in the area, the study showed. Insurers use narrow networks to lower premiums in various ways, by excluding high-cost providers and by directing patients to high-value providers. Insurers can also use the market power of networks to negotiate lower reimbursement levels with participating providers in exchange for greater volume. The problem, according to the study, is that narrow networks leave consumers vulnerable to the financial burden of out-of-network care.
In total, 11% of silver plans sold in the marketplaces are considered “extra small”—meaning they cover fewer than 10% of physicians in the plan region. Another 30% are “small”—covering between 10% and 25% of the area's physicians. The study shows that health maintenance organizations are more likely to have small physician networks compared to preferred provider organizations. The researchers also show that networks vary when sized by physician specialty: in primary care, 36% of networks are considered small or extra-small, compared to 23% for internal medicine subspecialties, and 59% for oncology.
The authors say the market should raise awareness of plan quality and costs and that marketplaces should inform consumers of the scope of the physician network in each plan. They think an easy-to-understand, “T-shirt size” network rating is one way to accomplish this. Another would be to allow consumers to quickly decide if a physician they trust is covered under a specific plan.
“Consumers need to be able to see the forest as well as the trees when they make a plan choice and these data are a first step in giving them the full picture of which physicians are covered under specific plans,” said Kathy Hempstead, who directs coverage issues at the Robert Wood Johnson Foundation.
Last month, Families USA pushed health insurers to offer more silver plans, the most popular exchange option. It also urged lawmakers to mandate insurers sell at least one silver plan with lower cost-sharing for common services such as doctor visits and prescription drugs.