“Narrow networks may seem like a bad idea,” David Dranove and Craig Garthwaite blogged last month. The two Northwestern University professors acknowledged that excluding some providers from health plans offered through the exchanges runs the risk of disrupting care patterns.
But the model is “not some cruel attempt to limit patient choice foisted upon us by the insurance industry,” the professors added. “Instead, these plans may provide our best opportunity for harnessing market forces to lower prices.”
The simple equation: Insurers say that limiting the size of the network allows them to steer patients to high-quality facilities and doctors; participating providers, meanwhile, may agree to price cuts in exchange for new volumes. (A previous edition of “Road to Reform” took a closer look at the narrow network model.)
And narrow networks aren’t necessarily a new idea, Darius Tahir points out at National Journal. In some ways, it’s the same concept behind payers’ attempts in the 1980s and 1990s to limit their network size, which met with criticism and helped create Any Willing Provider laws.
Could narrow networks be better perceived — and received — with better phrasing? Industry consultant Vince Kuraitis thinks so.