I’ve been thinking about health insurance networks more than I normally do lately and definitely more than healthy. I have an inkling that my likely dissertation will be on provider networks offered by insurers and the realities of these networks on the ground versus the realities represented in regulatory filings. There has been awesome research on network size and access to care between insurers as well as variation between insurers. However, I don’t think there has been a lot of focus on insurers offering multiple networks and comparing those networks with the other networks offed by the same insurer. My former employer (UPMC Health Plan) offered three distinctive ACA networks (Partners, Select, Premium) when I was there. I write at Balloon Juice because I spent the summer of 2013 building Select. They had dozens of other networks for commercial, Medicare, Medicaid and CHIP products.
I want to introduce a few archetypes of networks that will help clear up my thinking and hopefully will be illustrative for y’all.
The first network is a single network that is offered by the insurer. The network itself is a subset of all potential clinicians and hospitals and service providers in an area. It might be most of them. It might be a few of them. It might be awesome. It might just suck. Those characteristics are important, but in the context of complexity for a single insurer, it is pretty simple. In or Out.
The next layer of complexity is to think about a network that is a complete subset of the original network. Every service provider in the smaller network is also in the bigger network but not everyone in the big network is in the small network. Insurers can design networks like this to get better pricing by leveraging providers against each other to agree to lower rates in return for more volume or insurers can carve out particularly high cost or high intensity provider groups as well. Consumers can find this confusing as it may be tough to figure out who is in one network (BIG only) or both networks (BIG and SMALL).
The next piece of the network complexity continuum are networks that overlap but also have some exclusivity.
Finally, we have some insurers that offer multiple networks that don’t ever touch.
Here the insurer offers two networks that share nothing. It might be because the insurer operates in multiple states so the Pennsylvania network has no overlap with the Rhode Island network. It might be that there is a clinical group/hospital chain that wants to offer an insurance product but not give up any control or revenue to other clinicians so they do a strict skinny home host. There could be all sorts of plausible reasons to do this. For most people it is the same decision task as the single network — are the desired docs and hospitals in or out?
Realistically, I think there are very few pure split networks as most insurers will use the same pharmacy benefit manager or capitate the dental claims to the same entity or have a common dermatologist in the middle of nowhere that they pay through the nose in order to maintain regulatory compliance.
From my time at UPMC, within insurer and line of business network variation can lead to a lot of patient and provider confusion so I’m trying to think my way through this complexity right now.
Betty
As someone on Medicare looking for supplemental coverage whi has a number of existing UPMC providers, would you have an opinion on their overall value? I know you haven’t been there for a while.
David Anderson
@Betty: No, I have no specific insight on anything that UPMC does beyond knowing that the first few chords of the violin intro to their commercials drives me nuts at this point.
PST
@Betty: I was very confused when I first got Medicare, but it became clearer with time. There is a big difference between Medicare supplement plans and Medicare Advantage plans. If you are using the term “supplement” in the technical way the government and insurance companies use it, then I don’t believe you have to worry about networks at all. These are standard products that always include any provider that accepts Medicare rates as payment in full. If you are using the term more generally to include buying a Medicare Advantage plan to save money or add some additional coverages, then networks mean a whole lot.
RSA
Cool. Good luck! I was wondering whether a network bottoms out at service providers or services, where a single provider might provide some in-network and some out-of-network services? More complexity, obviously.
In case it’s helpful, though you probably already know this, if we think of those circles as sets of providers (or other elements), other representations such as directed graphs are applicable. For me, switching between different representations sometimes helps me understand something better.
David Anderson
@RSA: Yeah, I’m building out DAGs for a pair of class papers on how and why do people get help on picking out insurance. Complexity is part of the DAG for these projects.
BurntOutDoc
Trying to explain how health plan networks operate would probably be similar to explaining how the stock market works. You can outline the theory, and warn the neophyte away from the obvious swindles. But the insurance company’s interests come first, and you can never deal with all the possible options to make the best decision as a patient. You want your longstanding PCP, but have to give her up if you want access to the medical center where they treated your cancer, which is in remission and “probably” won’t require any further treatment. Yes, your generic BP med is covered, but the new wildly expensive medication you will be prescribed halfway through the year won’t be. My favorite this year is being told by the company an office is “in plan”, but you get to your appointment, and they say the insurer says they aren’t in plan when they try to bill.