Since the introduction of Obamacare, California has boasted about its high signup rates, stable premiums, selective choice of insurers and consumer-friendly standardization.
Now it just has to figure out a way to make doctors more available to patients.
A new study (pdf) from the Leonard Davis Institute of Health Economics at Penn says only three states—Georgia, Florida and Oklahoma—have narrower doctor networks than California. A narrow network is one in which 25% or less of the doctors in an area participate through the health exchange.
Seventy-five percent of California’s marketplace plans have narrow networks. The nationwide average is 41%. Twelve states managed to avoid any narrow networks.
Doctor shock snuck up on consumers and the media in early 2014 as published lists of available doctors proved to be worthless and network size estimates appeared to more art form than science. But it shouldn’t have.
Fifteen years ago, most everyone with insurance had the freedom to choose their doctor. Now, 99% of people are under some sort of restriction. America's healthcare industry has been narrowing networks since the rise of PPOs, HMOs, EPOs and POS, which are based on such restrictions. Having a smaller pool of doctors and hospitals can be a key to keeping costs down for insurance companies.
The report lists three ways insurers use narrow networks to save money:
“They can directly exclude high-cost providers from the network. They can offer a fixed lower reimbursement level to all providers, resulting in a set of providers opting out of the insurer’s network. They can segment their network into tiers, with higher cost-sharing for the higher tiers, resulting in a de facto narrowing of the network for price-conscious consumers.”
The clever manipulation of healthcare availability by insurance companies is a foregone conclusion. Obamacare is not single-payer, Medicare-for-all, insurance. But a marketplace driven by consumer choice is ill-served by a paucity of information about doctor networks.
There is no way for a consumer to find out the size of a particular network when shopping for a plan. “It is difficult for a consumer to assess network size, even as a broad concept,” the report says. “As a result, the trade-off between network size and premiums is not at all transparent.”
That’s not all that is a tad opaque. “It is even hard to gauge which providers are in the network. . . . Provider directories are notoriously out-of-date.”
This could change in 2016, when new federal rules require the states to figure out how to publish the accurate provider directories that, so far, have eluded them. But the new rules don’t directly affect narrow networks.
The report says research has not yet established why some states have narrow networks and others do not. But the authors wrote that there was a strong correlation between states with lots of HMOs and narrow networks. Conversely, states with lots of PPOs had fewer narrow networks.