Victor Filadora, MD, MBA
Whether you call them narrow, tiered, or high-performance networks, insurance plans that limit which doctors have in-network status have become a mainstay of healthcare, helping keep costs down but stoking concerns and complaints from hospital administrators and regulators about patients’ access to care.
On the federal and state healthcare exchanges, 45% of insurance networks nationwide fall into the “narrow” category, according to a recent McKinsey study.1
That includes the 17% that are considered ultra-narrow, meaning they cover 30% or less of area hospitals.
Insurers have been creating narrow-network HMOs and similar offerings for at least 2 decades, but like high deductibles and other cost-containment strategies, they have become more prominent in the last few years. Their relatively low premiums have proved attractive to consumers who are now required by law to buy health insurance and increasingly to employers trying to keep a lid on benefits spending.
Between 2007, when 15% of companies that offered workers health insurance included a so-called “high performance” provider network, and 2013, the figure climbed to 23%, according to the Kaiser Family Foundation.2
The plans really are cheaper, at least as far as premiums are concerned: on the exchanges, median premiums this year are 15% to 23% higher for traditional broad network plans than for the equivalent narrow network plans, the McKinsey study found. That’s a bigger difference than in 2014, illustrating their growing appeal. Narrow networks have become a common feature of the less expensive bronze and silver exchange plans.
The study also concluded that there is no “meaningful performance difference” between the broad and narrow networks based on Centers for Medicare & Medicaid Services (CMS) hospital metrics. Yet critics argue that by excluding major hospitals and cancer centers from popular, less expensive plans, insurers are at the very least inconveniencing patients who must travel farther for treatment, and in some cases forcing them to forsake their best options at the risk of being saddled with huge debts for out-of-network care.
“We find often that patients say they selected their insurance based just on the lowest cost at the time. All of a sudden you're diagnosed with cancer and then when you actually research the policy, there's very little coverage, horrible benefits, high co-pays and now, the new scenario is a very limited network,” said Terrie Kothe, vice president of managed care at Roswell Park Cancer Institute in Buffalo, New York.
The cost-cutting focus of narrow networks is particularly blind to the need for high-cost care for rare and complicated conditions treated at cancer centers and other specialty providers, critics say.
Roswell Park initially found itself excluded from 2 of the 7 exchange plans in its region and 11 of 16 statewide, the Associated Press reported last year.3
Since then the institute has seen some cancer patients opt to get treated elsewhere, only to receive inadequate treatment and subsequently return to Roswell Park sicker and in need of more intensive care, hospital executives said.
“After they make a decision not to be seen here because of co-pays or out-of-pocket payments, they go into the community, they get the care, and then in some instances they end up back here and we are working to manage their complications,” said chief of clinical services Victor Filadora, MD, MBA. “As you can imagine, the cost of care due to complications is high.”
“For a patient who tries to come to Roswell and is unable to, that can be devastating to them personally as well as financially and medically; that's our major concern,” Kothe said. “We're an entity that was set up to treat cancer and be available to everyone in the community, across the state or across the country. By virtue of these new narrow networks, there seems to be a new restriction on that. It's not fair to those people.”
Roswell Park is among a number of leading cancer centers that found themselves out of network for many local patients when the first exchange plans were released late in 2013, apparently because insurers considered them too expensive. MD Anderson Cancer Center said it was in less than half of the plans in the Houston area, and Memorial Sloan Kettering was included by just 2 of 9 insurers in New York City, according to the Associated Press.
Of 19 nationally recognized comprehensive cancer centers surveyed, only 4 said they were in all the insurance networks on their state exchange.