“Doc Shock”: Why Can’t Covered California Provide Accurate Physician and Hospital Lists?

Monday, February 10, 2014

California’s health exchange, its version of Obamacare, is getting major flack for pulling from its website—for the second time—its promised list of doctors and hospitals available to enrollees, depending on the insurance company chosen.

Customers complained that the lists were inaccurate and misleading, and deprived them of a key tool for figuring out which health insurance company to select. The exchange was late to post the listings in the run-up to enrollment last year and then pulled them in mid-October when it became apparent they weren’t accurate.

The new and improved lists were reintroduced with a bit of fanfare last month, but were pulled again last week for basically the same reason. People were signing up with specific insurance companies with the understanding that their doctors were in the network. Way too often, they were not.

Customers can check with their insurance companies directly for more definitive information, but like calls to Covered California, that could entail hours on the phone with no guarantee of a happy ending. Or the physicians and hospital themselves can be called. But, as customers are finding out, there is no guarantee that any of them have correct information.  

Ultimately, responsibility rests with the state for not getting this aspect of securing health insurance nailed down early. But administering the Affordable Care Act has been a work in progress that has had to overcome resistance from the medical profession, the insurance industry and political opponents.

“There's a lot of confusion,” Donald Waters, executive director of the Alameda-Contra Costa Medical Association, told the San Francisco Chronicle. “The physicians don't know if they're actually participating” in the exchange’s networks.

One of the reasons they don’t know is because a lot of them aren’t, but negotiations between physicians and insurers are still ongoing. The dirty little secret of the Affordable Care Act is that those using the health exchange, presumably to receive a premium subsidy, have far fewer choices than those who deal directly with an insurance provider.

In other words, someone whose doctors are in the regular Blue Shield network may very well not be able to find them in the Blue Shield exchange network.

Having a smaller pool of doctors and hospitals is the key to keeping costs down for insurance companies. It’s called “doc shock” by some, “network shock” by others and it’s nothing new. Fifteen years ago, most everyone with insurance had the freedom to choose their doctor. But the introduction of PPOs, HMOs, EPOs and others ended up putting 99% of people under some sort of restriction.

The Blue Shield network in Covered California includes just 60% of the doctors and 75% of the hospitals in the full network, according to the Chronicle. Perhaps that number would be higher if Blue Shield wasn’t reimbursing the exchange participants 30% less than those billing outside of it.

Bloomberg says the problem of doc shock is more acute in California than, say, Washington state. Up north, the exchange and nonexchange networks are very similar. California is at “the other end of the spectrum” with top hospitals like Cedars-Sinai and UCLA taking a pass on Covered California.

Narrow exchanges like California’s will, by necessity, have cheaper doctors. It is hard to imagine that doesn’t translate into crummier care. Eventually, there will be studies that compare the health-care outcomes of those in and out of the exchanges and give some new ammunition to those who favor a single-payer system of health-care that levels the playing field somewhat.

Or maybe House Republicans will be successful with their 123rd vote to repeal Obamacare and we can all return to skyrocketing premiums, growing inequality of service and bitterness toward sick and poor people who don’t take proper care of themselves.

–Ken Broder        


To Learn More:

Covered California Pulls List of Physicians from Website (by Susan Abram, Los Angeles Daily News)

California Health Exchange Pulls Error-Ridden Physician List—Again (by Chad Terhune, Los Angeles Times)

Covered California Yanks Error-Filled Physician Lists (by Chris Rauber, San Francisco Business Times)

Covered California Clients Have Trouble Finding Doctors (by Victoria Colliver, San Francisco Chronicle)

Network Restrictions Are Nothing New for American Health Care Consumers (by Kevin Drum, Mother Jones)

“Doc Shock” On Deck in Obamacare Wars (by Megan McArdle, Bloomberg)

Employer Health Benefits 2013 Annual Survey (Kaiser Family Foundation) (pdf)

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