A lot of attention is being paid to how health insurance products in the Affordable Care Act marketplaces have changed this year. Much of the focus has been on narrowing networks, as well as increased premiums and deductibles. There are scattered reports about loss of access to specialty hospitals in some markets, and a general narrative suggesting that overall access to top-rated providers in marketplace plans has deteriorated.
The reality, for both health systems and their patients, is mixed. Currently, most marketplace plans still include a highly rated hospital. Reductions in choice among plans offered through the ACA marketplaces, however, are consistent with broader trends in plan design, and next year could bring more changes.
The Robert Wood Johnson Foundation recently looked at a group of elite hospitals to see how their participation in marketplace plan networks changed between 2015 and 2016. The hospitals were selected from U.S. News & World Reports' “Best Regional Hospitals” list. For every metropolitan area or state for which U.S. News ranked hospitals, we looked at the two most highly ranked, for a cohort of 156 hospitals.
We first identified the network affiliations of regionally ranked hospitals in marketplace plans. Of the hospitals we reviewed, nearly all—more than 95%—participated in at least one marketplace plan in both 2015 and 2016. Yet more than half (57%) reduced the number of networks in which they participated, and the total number of marketplace plan networks in which these hospitals participated dropped by 20%.
This is reassuring overall for patient access, although the results certainly suggest some important changes are underway. From the perspective of hospitals and health systems, participation in networks for marketplace plans may be viewed as an uncertain prospect. In most regions, this is a relatively small market segment, and may be viewed as noncritical. Contracted amounts may be less than employer-sponsored plans, and collections due from patients are often much higher, which may increase bad debt. The stability of carriers is often sometimes in question. Carriers in financial trouble may seek to shed network contracts with more expensive systems.
While network changes within a contract year are hardly unknown in employer-sponsored insurance, the impact may be far greater in the subsidized direct-to-consumer individual marketplace, and could result in more demands for patient assistance. In the more transparent ACA marketplace, these network disruptions are more highly publicized, and may have reputational consequences for health systems.
Despite these potential pitfalls, there are obviously advantages to participation. For safety net institutions, participation in marketplace plans can provide much-needed commercial revenue. Many consumers transition between the ACA marketplace and employer-sponsored insurance, so patient loyalty created in the nongroup market may pay off down the road.
Getting a handle on the extent of hospital participation in marketplace plans is never easy. While changes in premiums and deductibles are easy to measure, understanding networks and how they change is a tougher nut to crack. There still aren't any reliable measures that characterize networks of marketplace plans, and plan “type” labels—PPO, exclusive provider organization, etc.—are increasingly inadequate. In the absence of good data on provider networks, it is difficult for customers to determine if, or how, the hospitals included in their marketplace plan have changed.
Katherine Hempstead is a senior adviser at the Robert Wood Johnson Foundation, directing efforts to increase coverage and analyze trends in healthcare access.