Network information and buying decisions

Networks are one of the major product differentiators.  If I needed to buy on Exchange, the Blue Cross and Blue Shield of North Carolina network is different than the Cigna network which is different than the Ambetter/Centene network.  Right now, my family is relatively healthy and low touch with the medical system so we would be fairly network agnostic once other factors such as premiums and cost sharing are involved.  However if one of my family members had the medical history that required continual relationships and specialized care, network would become very important in our decision making process.

We would be relying on directories to make choices.  Our purchase choice would be locked in for a year while the directory may or may not be pragmatically accurate at the moment of the decision.  Today’s directory is guaranteed to be inaccurate six months from now.  The question is whether or not it will be materially inaccurate or just “normally” inaccurate.

Wesley Sanders notes that there are few reasons for Exchange insurers to care strongly about their directories:

 

People are locked into their contracts for a year. They can’t leave even if they had strong reason to believe that they were buying a policy with a critical provider set in it and then discover in January or February that those providers are actually not in network. If they made the buy/no buy decision partially on the basis of a particular specialist/hospital set being in the network and then find out that either those providers never were in the network OR their contracts expire early in the policy year, then the actual policy that is bought is materially different than the policy that the buyer reasonably thought they were buying.

As long as we count on individual decision making as a means of unleashing market discipline, then we need to make sure that the variance between what people are thinking that they are buying and what they actually are buying is as small as possible.






9 replies
  1. 1
    Another Scott says:

    I’ve had the same BC-BS insurance for about 30 years. It seems to be reasonably well accepted in this area (NoVA). I’m happy with my primary care physician. Were I to think about changing insurance companies, my first stop would be to ask his office “what insurance companies do you accept, and what network do you recommend for specialists that you recommend?”

    Am I being naive to take that approach?

    Yes, the directories should be correct. There’s too much about the US medical care industry that is broken. But “Use the source, Luke!” (i.e. ask the doctors what they accept) would seem to me to be the first stop.

    Thanks.

    Cheers,
    Scott.

  2. 2
    Matt says:

    [W]e need to make sure that the variance between what people are thinking that they are buying and what they actually are buying is as small as possible

    There’s a tool for that already: laws against fraud. Put a couple insurance execs in the slammer and see how fast those directories get accurate…

  3. 3
    KateP says:

    I am trying to help my daughter in law yet again and it is so confusing. We are in NE Ohio and comparing plans between Summa Care which is Akron area only and MedMutual of NE OH. On advantage I just brought up to her is the opportunity to use University Hospitals in Cleveland in worse care scenario needing specialty care. I don’t see anything beyond the Summa Hospitals in Akron for the other. Still trying to figure out why the Bronze plan has 0% co-insurance while Silver has 30%.

  4. 4
    Yarrow says:

    People are locked into their contracts for a year. They can’t leave even if they had strong reason to believe that they were buying a policy with a critical provider set in it and then discover in January or February that those providers are actually not in network. If they made the buy/no buy decision partially on the basis of a particular specialist/hospital set being in the network and then find out that either those providers never were in the network OR their contracts expire early in the policy year, then the actual policy that is bought is materially different than the policy that the buyer reasonably thought they were buying.

    This is terrifying. We have no control and they have all the control. You make the best decision you can with the information available to you but you can still get screwed. There need to be consequences for this happening.

    @Matt:

    There’s a tool for that already: laws against fraud. Put a couple insurance execs in the slammer and see how fast those directories get accurate…

    I wish. Like Kay keeps saying, there’s an epidemic of white collar crime. We need to deal with it.

  5. 5
    Yarrow says:

    @KateP:

    Still trying to figure out why the Bronze plan has 0% co-insurance while Silver has 30%

    Ran into this as well. It’s absolutely baffling, especially with no deducible.

  6. 6
    p.a. says:

    One of the laughably absurd bases of modern (or at least Chicago-style school of) economics was the theory of ‘perfect information’ which was then modified by necessity due to overwhelming contrary evidence to ‘sufficient information’. Still AFAIK the meme, now under long term, increasingly successful attack by the behavioral economics cohort.

    Probably the best solution for people who have actual lives to lead is the growth of healthcare sherpas, digital and/or flesh and blood. But just look at the condition of the financial/retirement advice industry to see what dystopian future may await this new industry and its clients.

  7. 7
    Alex says:

    So, David, if a state insurance regulator wanted to enforce directory accuracy standards, what level of accuracy would be reasonable, and what sort of penalties would make it worthwhile? Would a $10,000 fine for not having a 90% accurate directory for a plan be enough? Should they have to reimburse patients if a listed doctor isn’t in the directory?

  8. 8
    Wesley says:

    Alex, $10,000 would be far too little. Centene got fined $250k in Washington and they haven’t changed behavior at all. Needs to be millions, every month, until they fix it.

  9. 9

    @Alex: My sledgehammer of god would be three fold:

    1) Insurer would be responsible for claims that are incurred by members who in good faith had a reason to believe that an actually out of network provider was in network at the time a service was received with no member cost sharing.

    2) Directory accuracy based on random audits would be a significant factor in Medicare Advantage stars or Medicaid managed care auto-assignment

    3) At some point of inaccuracy with sufficient time to clean up the process, fraud charges are filed against the CEO and COO in their personal capacities.

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